Cabinet Office Minister Pat McFadden has called for the UK to explore a ban on political donations made via cryptocurrencies, warning that such transactions could undermine democratic processes.
Speaking at a transparency forum in Westminster, McFadden argued that anonymous crypto donations pose a significant risk to electoral integrity. "We must ensure political funding remains transparent and accountable," he stated.
Growing Concerns Over Crypto Influence
The minister highlighted how digital currencies' pseudonymous nature could enable foreign interference or illicit funding in British elections. This follows similar moves by the US and EU to regulate crypto in campaign finance.
Key Arguments for the Ban:
- Prevent anonymous foreign donations
- Maintain traceability of political funding
- Align with anti-money laundering efforts
- Protect against election manipulation
McFadden's proposal comes as the Electoral Commission reports increasing cryptocurrency use in UK political donations, with over £2 million received in digital assets since 2020.
Industry and Opposition Reactions
While transparency advocates welcomed the suggestion, crypto industry representatives warned against "painting all digital currency use with the same brush". Shadow Minister for Democracy Florence Eshalomi countered that existing donation laws already address these concerns.
The Cabinet Office confirmed it will launch a consultation on potential crypto donation regulations later this year.
