The Next Pm Could Decide Britain’s Crypto Future

What Happened

This week’s announcement from the Bank of England illustrates the point well, even if it was partly overshadowed by political noise. Its policy statement and draft rules on sterling-denominated systemic stablecoins marked a clear step forward.

Market Context

The required proportion of backing assets held in central bank deposits has been sensibly reduced from 40% to 30%, while the caps on holdings have been replaced by issuance limits.

That objective should transcend party lines. Encouragingly, there are signs that it does. Just last week, Conservative Party peers tabled amendments to the Financial Services and Markets Bill calling for a wholesale tokenisation strategy and a dedicated digital asset framework.

Why It Matters

We are imminently expecting a handful of policy statements from the FCA – covering everything from cross-cutting handbook reforms and the Regulated Activities Order. These will likely land much before a new Ministerial HM Treasury team is installed.

I mention this because political cycles may be volatile, but regulatory frameworks are built through sustained, technical engagement.

It is too early to call who might stand against Burnham, but a coronation rather than a contest looks like the most probable outcome, especially following the early backing of Wes Streeting, himself long touted as a likely contender.

Details

On Monday morning, June 22, Keir Starmer finally acknowledged what his Cabinet, parliamentary colleagues and the public had already concluded: he no longer had the authority to lead.

In doing so, he became the sixth prime minister in a decade – a level of political instability unmatched in modern British history. Every sector is now asking the same question: Who and what comes next? So, for digital assets, let’s unpack that.

Direction of Travel

From a policy perspective, the ship has largely set sail. Regulators are in the final stages of formalising a comprehensive framework, officials are listening, and engagement has been genuinely constructive.

“Each systemic stablecoin will be subject to an initial issuance maximum of £40 billion,” wrote The Bank of England.

Politically speaking, we have navigated seven City Ministers since 2022 alone. Yet despite the political turbulence, the notion of a “global cryptoasset hub”, first coined by former PM Rishi Sunak, has survived.

Whoever walks through the door of No 10 – and whichever team follows them – will not reverse this. The wheel has already turned.

UK Crypto Sector Needs a Clear Political Wall

While we have made great progress on several ‘sticky’ issues for the sector, there are still some critical areas that need clear political will: the future direction for DeFi, a workable prudential regime for firms, workable FinProms rules, and a level tax playing field for stablecoins to name a few.

We must keep engaging at a political level to keep this momentum and keep landing messages around growth, productivity and jobs – all areas that transcend personnel. It is incumbent on industry to ensure that message carries through. We will certainly be playing our part.

More crucially, the digital asset agenda must not become politicised and dragged into the culture wars in the way it did in the US and as we’ve begun to see this year in the UK, thanks to so-called ‘crypto donations’.

This latest news shows how quickly the conversation descends into many of the usual tropes industry is familiar with, which are largely based on misunderstanding and misinformation.

Because strip away the headlines and the memes, and what we are actually talking about is rather prosaic. This is plumbing.

Financial infrastructure required to ensure the City of London remains a global centre of finance. With yesterday marking the tenth anniversary of Brexit, the point feels all the more pertinent.

Meanwhile, the Liberal Democrats are actively developing their own policy platform for the sector.

And it must remain that way. The long-term success of the UK’s digital asset ecosystem will depend not on partisan point-scoring.

Who Steers the Ship?

To add a layer of Westminster intrigue, sections of the media have been quick to elevate Al Carns as a possible dark horse contender. Yet the arithmetic looks challenging. Without the backing of the 81 MPs needed to trigger a contest, his route to the ballot is narrow.