Keir Starmer’s Win in UK Election 2024: What It Means for UK Crypto Regulations

Published by

Qadir AK

July 5, 2024

The Labour Party’s landslide victory in the UK general elections marks a significant political shift, ending 14 years of Conservative leadership under Rishi Sunak. As Keir Starmer prepares to take office, the UK’s crypto community is abuzz with speculation about potential changes in regulatory policy and market dynamics. Notably, the global crypto market cap fell 4.58% to $2.07 trillion today.

What’s Next for Crypto?

While the Labour Party’s impact on the crypto market, digital economy, and central bank digital currencies (CBDCs) remains uncertain, analysts suggest a few possible directions. The new Labour government might prioritize adopting CBDCs and advancing securities tokenization.

Tighter Regulations on the Horizon

Labour’s victory signals a push for stricter regulatory policies. These could involve mandatory risk disclosures, enhanced KYC (Know Your Customer) and AML (Anti-Money Laundering) requirements for crypto exchanges, and the introduction of insurance schemes to safeguard investors’ funds. Increased scrutiny on crypto exchanges might also entail rigorous licensing, regular audits, and heightened transparency.

Additionally, the Labour Party may implement detailed tax policies on crypto transactions, ensuring fair contribution to public finances through capital gains tax obligations and reporting requirements.

The Exit of Crypto Advocates

The recent exit of crypto-friendly MPs, such as Lisa Cameron, may lead to a reduced presence of crypto advocates within the government. This shift could impact the level of support and promotion of crypto-friendly policies in Parliament.

The Labour Party’s manifesto includes pro-economic measures, but clarity on crypto policies is lacking. The former Conservative government had been preparing to implement regulatory steps for crypto in July. However, Starmer’s administration might take longer to understand and navigate the crypto environement before making any significant policy decisions.

Market Reactions

Although the Labour Party has not taken a strong stance on crypto yet, however, they have not commented negatively also giving a ray of hope to millions of crypto investors in the country. In the meantime, traditional financial players, like WisdomTree, are already positioning themselves by filing for crypto exchange-traded products (ETPs), indicating a potential shift in market dynamics.

Comparative Perspective with the US

While crypto was not a focal point in the UK elections, the new regulatory changes in the US, particularly following the 2024 Presidential election, could influence the UK’s approach. Former President Donald Trump’s pro-Bitcoin stance may encourage similar sentiments in other major economies, including the UK.

As the dust settles, the crypto community will closely watch for any policy change or regulatory changes that could impact the market. The anticipation of how Starmer’s administration will handle the growing crypto sector adds an element of uncertainty and potential opportunity for investors and stakeholders alike.

What changes do you foresee for crypto under Keir Starmer’s leadership?

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.