The Labour Party is a favorite to win the U.K.’s upcoming general election.
Regardless of who is elected, crypto policy should still continue developing as it has been, said Adam Jackson, director of policy at Innovate Finance.
A U.K. election is not going to derail the progress the country has made when it comes to regulating the crypto sector, industry stakeholders told CoinDesk.
An election date has not been announced yet, but it is expected to happen in the country this year. The ruling Conservative party – which has been in government for nearly 14 years, since it was first elected in May 2010 – has ushered in a sweep of crypto measures. The party set out to make the country a crypto hub in 2022 and has since introduced a markets bill to enable crypto to be regulated as a financial activity by the Financial Conduct Authority (FCA).
Now the Conservatives have promised to put in place legislation for stablecoins and staking in the coming weeks – before the next election. Many believe that is a realistic goal.
The country needs secondary legislation that formally tasks the FCA with regulating crypto, including stablecoins, said Adam Jackson, director of policy at Innovate Finance, in an interview.
“That’s what the government said they would do,” Jackson said. “We haven’t heard otherwise as to why that’s not feasible. So all things being equal they should have those powers by the time of the national election.”
Laura Navaratnam, U.K. policy lead at the Crypto Council for Innovation, agreed that the Conservative government at the moment is “definitely” on track adding that even the country’s regulators – the Bank of England and the FCA – have been moving forward by publishing discussion papers on stablecoins.
“There is always the risk with any level of political turbulence that some of that stuff could slow down,” Navaratnam told CoinDesk in an interview.
Labour
The Conservatives may have a couple of months left before an election is announced, but once it is they will have to go head to head with their opposition party and could lose power. The current favorite to win is the Labour party, according to an Ipsos poll that surveyed over 1,000 people in April. The poll shows that 44% of voters intend to vote Labour while only 19% intend to vote for the Conservatives.
The U.K. recently hosted a local election which showed a large swing towards the Labour party and marked major losses for the Conservatives. Labour managed to attain 1,158 local councilor seats and gained 186 whereas the Conservatives only attained 515, and lost 474, falling behind the Liberal Democrat party also, BBC data showed.
The size of the majority in an election matters, Jackson said.
“I think for any party, the smaller the majority, the more they will be constrained in what they do in some of these areas,” Jackson said.
Labour so far has indicated that it wants to make the U.K. a securities tokenization hub in its plan for the financial sector. Tokenization is the process of creating a digital representation of a real thing including financial assets. A tokenization regime is something that people in the country have been calling out for.
“We’re pleased to see that Labour have committed to helping turn the U.K. into a global hub for digital tokenization as part of the party’s policies for the financial services sector,” CryptoUK said in February.
However, Labour did not say much about how it plans to regulate crypto.
“So I think the question we have is, you know, what’s the Labour approach on that? It’s not a question that they can ignore,” Jackson said.
Labour said in its report that this was only the “first stage in outlining Labour’s vision for the future of Britain’s financial services,” indicating more information may come.
“I think there’s a long time between now and an election and so I wouldn’t expect them to further the details out at this point,” said Varun Paul, senior director and business lead for CBDC and financial market infrastructure at Fireblocks. “I’m pleased – I don’t think that digital assets are proving to be a political hot potato at the moment, I think we’re lucky in the U.K. that it’s not become a political battleground like it has been in the U.S.”
Some lawmakers in the U.S. have been calling for a central bank digital currency to be banned while others want the country to conduct a CBDC pilot. Meanwhile, across the pond, Labour indicated that it intends to support the Bank of Englands’ digital pound work in its report.
“We should see quite a stable approach to financial services, regulation and things going in the same direction,” Jackson said.