In a bold move aimed at the cryptocurrency sector, Nigel Farage, leader of Reform UK, has promised significant tax cuts on crypto investments and a plan to establish a UK Bitcoin reserve if his party wins in the upcoming elections. Speaking at the Digital Asset Summit in London, Farage expressed his commitment to supporting the burgeoning industry, asserting, “When it comes to your industry, when it comes to growth in this industry, then I am your champion.”
The proposed legislation introduced by Farage includes a dramatic reduction in the capital gains tax on cryptocurrency transactions, lowering it from the current 24% to a flat 10%. Furthermore, he aims to leverage approximately £5 billion worth of Bitcoin derived from seized criminal assets held by the Bank of England to establish a national Bitcoin reserve.
Reform UK has positioned itself as the first major political party in the UK to accept cryptocurrency donations, currently facilitating contributions in Bitcoin, Ethereum, Solana, and USD Coin through its dedicated platform. This strategy mirrors efforts seen in the United States, particularly under former President Donald Trump, who has actively supported the crypto industry since his election victory in 2024.
Farage’s agenda extends beyond tax reductions. His proposals would enable British taxpayers to fulfill their tax obligations directly in Bitcoin, with options to either convert the funds into pounds or direct them into the proposed reserve. Additionally, the plan seeks to eliminate the practice of “debanking,” whereby banks deny services to customers based on their lawful crypto activities—a concern Farage highlighted based on his personal experiences with multiple banks denying him an account. He expressed that Bitcoin offers a level of freedom, stating, “No wonder so many people are going for Bitcoin—because they can’t close you down.”
Critically, Farage took aim at the Bank of England’s proposed central bank digital currency (CBDC), labeling it as “the ultimate authoritarian nightmare” and pledging to halt the initiative if Reform gains power. He also criticized the Bank of England’s limits on stablecoin holdings for individuals and businesses, describing these restrictions as “frankly ridiculous.” He reported that he had discussed these limits directly with Andrew Bailey, the Governor of the Bank of England, emphasizing the urgency for the UK to enhance its regulatory framework for crypto.
Farage contended that the UK government is lagging behind international competitors and must act swiftly to regulate the cryptocurrency sector to maintain its status as a leading global financial hub. He stressed that the topic of digital assets and cryptocurrencies remains under-discussed, pointing out the absence of a regulated market in Britain. With a promise to enact the Crypto Assets and Digital Finance Bill expediently should Reform secure victory, Farage is capitalizing on the growing interest in cryptocurrencies among the public.
Despite leading in various polls, Reform UK faces obstacles under the current first-past-the-post electoral system, which poses challenges in converting popular support into parliamentary representation. The 2024 general election results illustrated this issue, where Reform garnered 4.1 million votes yet only secured five seats.
The next scheduled UK general election is anticipated in 2029, granting ample time for shifts in both the political landscape and market conditions. Meanwhile, the UK’s regulatory framework is influenced by global competition, particularly from the U.S., which has adopted crypto-friendly policies, and the European Union, which has established a unified regulatory approach for digital assets.
Recently, the Bank of England has indicated it is considering exemptions for proposed stablecoin holding limits that could benefit crypto exchanges and firms requiring substantial holdings for liquidity. Governor Bailey has acknowledged the potential of stablecoins to foster financial innovation and coexist with traditional banking systems, further emphasizing the necessity for a coherent regulatory stance in the UK.
As it stands, the Financial Conduct Authority is set to conclude its consultations on whether crypto firms should adhere to the same regulatory standards as traditional financial institutions by the end of the year, with an implementation timeline beginning in January 2026. Industry leaders warn that overly stringent regulations could drive business and talent away from the UK, underscoring the urgent need for thoughtful engagement with the evolving landscape of cryptocurrencies.
