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The UK Just Gave Crypto Legal Recognition While Planning to Ban It From Politics

MarketDash Editorial Team
5 days ago
Britain codified digital assets as a new property category this week, but the same government is working on legislation to block crypto donations to political parties—a contradiction that reveals the country's complicated relationship with digital finance.

Here's an interesting contradiction: The United Kingdom on Tuesday officially gave cryptocurrency the legal status of property—a major legitimization of digital assets—while simultaneously preparing legislation to ban political parties from accepting crypto donations. It's like inviting someone to the party and barring them from the door at the same time.

Digital Assets Get Their Own Legal Category

The Property (Digital Assets etc.) Act 2025 received Royal Assent from King Charles III this week, formally establishing digital assets like Bitcoin (BTC) and stablecoins as a legally protected form of property. This isn't just a technical tweak—it creates an entirely new property category alongside the traditional classifications of physical and intangible property.

CryptoUK, an industry trade association, explained that the law provides digital assets with clearer legal standing for ownership disputes, fraud cases, and insolvency proceedings. Advocacy groups are calling it one of the most significant changes to English property law in modern history, which seems only slightly hyperbolic.

The groundwork was laid by the Law Commission, which recommended this framework back in 2023. Courts had already been treating crypto as property through case law, so the new statute essentially codifies what judges were already doing and removes legal uncertainty for businesses and individuals holding digital assets.

Stablecoins Get the Regulatory Treatment

The UK isn't stopping at property rights. The Bank of England recently launched a consultation on establishing a regulatory regime for sterling-denominated stablecoins. Deputy Governor Sarah Breeden said last month that Britain intends to keep pace with the United States in setting rules for digital money and expects the framework to be implemented quickly.

Regulators view stablecoins as a significant piece of the future payments landscape, which means new oversight is necessary to encourage adoption while maintaining financial stability. The message is clear: the UK wants to be a player in digital finance, not a spectator.

But Crypto Can't Fund Political Campaigns

Now for the awkward part. While the UK strengthened property rights for cryptocurrency, the government is simultaneously planning to prohibit political parties from accepting crypto donations, according to Protos, which cited officials familiar with the developing legislation. The measure is expected to appear in a forthcoming Elections Bill.

POLITICO reported that the government didn't deny the planned restriction and said further details will be announced once the bill is finalized. Ministers have expressed concerns about the difficulty of tracing the origin of cryptocurrency contributions and the risk of foreign interference in British elections.

The Guardian noted that the ban won't be ready in time for the next Elections Bill due to the complexity of implementing a compliant verification system. So while the intent is there, the execution is still being figured out.

Reform UK Has the Most to Lose

The proposed ban would directly hit Reform UK, which announced last year that it would accept cryptocurrency donations to support its pro-innovation platform. DonationWatch data shows the party has raised more than $23 million since its launch as the Brexit Party, and several large donors use digital-asset infrastructure.

Christopher Harborne, a shareholder in Bitfinex and Tether, has contributed more than $11.5 million to the party. Reform UK currently uses Radom, a virtual asset service provider registered under EU MiCA rules but not under the UK's Financial Conduct Authority, to process digital contributions.

Critics argue these arrangements raise serious questions about donor verification. Spotlight on Corruption, an anti-corruption charity, recommended banning crypto donations entirely due to the risk of unverified overseas funding and the potential use of privacy-focused tokens to obscure donor identities.

Transparency Versus Innovation

The charity's submission to lawmakers warned that crypto transactions can obscure funding sources, making it harder for voters to understand who's backing political campaigns. They also raised concerns that hostile actors could funnel large sums through intermediaries or crowdfunding mechanisms without detection.

The group urged lawmakers to require parties to use only FCA-regulated firms if crypto donations remain permitted. Government officials have acknowledged that tracing the origin of digital assets remains challenging even with blockchain analytics, which theoretically should make everything transparent.

These developments come as the UK tries to modernize election oversight while navigating the rapid expansion of digital finance. The split policy approach reveals Britain's attempt to provide legal certainty for cryptocurrency ownership while tightening controls on its use in political activities. You can own it, trade it, and sue over it—just don't try to fund a political campaign with it.

Back to News

The UK Just Gave Crypto Legal Recognition While Planning to Ban It From Politics

MarketDash Editorial Team
5 days ago
Britain codified digital assets as a new property category this week, but the same government is working on legislation to block crypto donations to political parties—a contradiction that reveals the country's complicated relationship with digital finance.

Here's an interesting contradiction: The United Kingdom on Tuesday officially gave cryptocurrency the legal status of property—a major legitimization of digital assets—while simultaneously preparing legislation to ban political parties from accepting crypto donations. It's like inviting someone to the party and barring them from the door at the same time.

Digital Assets Get Their Own Legal Category

The Property (Digital Assets etc.) Act 2025 received Royal Assent from King Charles III this week, formally establishing digital assets like Bitcoin (BTC) and stablecoins as a legally protected form of property. This isn't just a technical tweak—it creates an entirely new property category alongside the traditional classifications of physical and intangible property.

CryptoUK, an industry trade association, explained that the law provides digital assets with clearer legal standing for ownership disputes, fraud cases, and insolvency proceedings. Advocacy groups are calling it one of the most significant changes to English property law in modern history, which seems only slightly hyperbolic.

The groundwork was laid by the Law Commission, which recommended this framework back in 2023. Courts had already been treating crypto as property through case law, so the new statute essentially codifies what judges were already doing and removes legal uncertainty for businesses and individuals holding digital assets.

Stablecoins Get the Regulatory Treatment

The UK isn't stopping at property rights. The Bank of England recently launched a consultation on establishing a regulatory regime for sterling-denominated stablecoins. Deputy Governor Sarah Breeden said last month that Britain intends to keep pace with the United States in setting rules for digital money and expects the framework to be implemented quickly.

Regulators view stablecoins as a significant piece of the future payments landscape, which means new oversight is necessary to encourage adoption while maintaining financial stability. The message is clear: the UK wants to be a player in digital finance, not a spectator.

But Crypto Can't Fund Political Campaigns

Now for the awkward part. While the UK strengthened property rights for cryptocurrency, the government is simultaneously planning to prohibit political parties from accepting crypto donations, according to Protos, which cited officials familiar with the developing legislation. The measure is expected to appear in a forthcoming Elections Bill.

POLITICO reported that the government didn't deny the planned restriction and said further details will be announced once the bill is finalized. Ministers have expressed concerns about the difficulty of tracing the origin of cryptocurrency contributions and the risk of foreign interference in British elections.

The Guardian noted that the ban won't be ready in time for the next Elections Bill due to the complexity of implementing a compliant verification system. So while the intent is there, the execution is still being figured out.

Reform UK Has the Most to Lose

The proposed ban would directly hit Reform UK, which announced last year that it would accept cryptocurrency donations to support its pro-innovation platform. DonationWatch data shows the party has raised more than $23 million since its launch as the Brexit Party, and several large donors use digital-asset infrastructure.

Christopher Harborne, a shareholder in Bitfinex and Tether, has contributed more than $11.5 million to the party. Reform UK currently uses Radom, a virtual asset service provider registered under EU MiCA rules but not under the UK's Financial Conduct Authority, to process digital contributions.

Critics argue these arrangements raise serious questions about donor verification. Spotlight on Corruption, an anti-corruption charity, recommended banning crypto donations entirely due to the risk of unverified overseas funding and the potential use of privacy-focused tokens to obscure donor identities.

Transparency Versus Innovation

The charity's submission to lawmakers warned that crypto transactions can obscure funding sources, making it harder for voters to understand who's backing political campaigns. They also raised concerns that hostile actors could funnel large sums through intermediaries or crowdfunding mechanisms without detection.

The group urged lawmakers to require parties to use only FCA-regulated firms if crypto donations remain permitted. Government officials have acknowledged that tracing the origin of digital assets remains challenging even with blockchain analytics, which theoretically should make everything transparent.

These developments come as the UK tries to modernize election oversight while navigating the rapid expansion of digital finance. The split policy approach reveals Britain's attempt to provide legal certainty for cryptocurrency ownership while tightening controls on its use in political activities. You can own it, trade it, and sue over it—just don't try to fund a political campaign with it.