UK Cabinet Office Minister Pat McFadden How suggested that political donations made within the country should not be made in the form of cryptocurrency. In a recent public statement, he noted that foreign powers could exploit cryptocurrency and has called on the electoral commission to ban it.
This is a natural byproduct of cryptocurrency simply having more prominence within the political scene. Because it is such a novel technology, any industry that sees widespread crystal use will come under more scrutiny. Take the gambling sector, for example. In the past, fiat currency was the only form of money being wagered on, but now, cryptocurrency is more common. As gambling expert Viola D’Elia explains, operators accepting Bitcoin are much more common. And because they are more common, there is more concern about misuse of the asset class and staying within legal boundaries.
The last few years have seen cryptocurrency become more prominent even within politics. Last year, US President Donald Trump famously accepted cryptocurrency for his campaign, though even that was not without a hitch. This has inevitably set a trend of more politicians around the world embracing cryptocurrency to collect donations from followers. It offers many benefits, such as quick transactions and a chance to appreciate, putting even more money in the politicians’ war chests.
Nigel Farage recently announced that the Reform UK party would be accepting cryptocurrency moving forward, but as McFadden explains, tracing such transactions is much harder. This essentially means that there could potentially be less transparency about who is donating to certain politicians and why.
Even more concerning, he says, is that it could open the door for foreign interference via donations. This is not far-fetched, given that cryptocurrency is already being used within International relations. Notably, North Korea has been accused of sponsoring crypto hacking groups that have stolen tokens from major exchanges around the world to evade sanctions and fund its nuclear weapons program.
In a recent meeting with MPs, McFadden stressed that transparency and honesty were needed to ensure a healthy political landscape within the UK. He also noted that more funding and support need to be provided for the Electoral Commission and the National Crime Agency. This funding will allow for better scrutiny of political donations using Crypto. He also stresses that dodgy companies and other unsavoury characters could use donations as a way to influence the political scene and that current laws need to be reviewed.
Many of the laws surrounding political donations and even cryptocurrency itself could find themselves outdated in a matter of years. Because the crypto sector is always evolving, and how tokens are leveraged rarely stays the same, there is a need to make sure that laws of all kinds reflect the current situation.
As time goes on, we can expect more prominent politicians to speak up about crypto use in the political arena and perhaps, more laws being passed to govern this both within the UK and beyond.