UK Ministers Urge Ban On Crypto Political Donations Amid Fears Over Foreign Influence
British lawmakers are warning that cryptocurrencies could become a covert channel for foreign money, bribes, and anonymous political donations — potentially threatening the integrity of the UK’s democracy.
The alert follows growing concern over the untraceable nature of digital currencies like Bitcoin and Ethereum, which can be sent across borders without names, banks, or identities.
Cabinet Office Minister Pat McFadden told Parliament there is now a strong case for outlawing political donations in crypto entirely.
After Labour MP Liam Byrne pressed him on whether the government was reviewing political finance rules related to crypto, McFadden said during the summer recess,
“It’s very important that we know who is providing the donation, are they properly registered, what are the bona fides of that donation.”
Concerns Grow As Reform UK Accepts Bitcoin
The debate intensified after Reform UK, led by Nigel Farage, announced in May it would begin accepting Bitcoin for campaign contributions — making it the first UK political party to do so publicly.
The move sparked backlash from regulators and anti-corruption groups, who warned it could open the door to unregulated foreign influence.
A UK-registered watchdog issued a report warning that cryptocurrencies could be exploited in “future political interference schemes” if oversight remains weak.
It said crypto’s anonymous nature makes it easier for illicit funds or foreign entities to secretly funnel money into UK politics.
Call For Stronger Oversight And Legal Reform
Both McFadden and Byrne said the solution lies in modernising political funding laws and strengthening the institutions that enforce them.
They urged the government to provide more power and resources to the National Crime Agency and the Electoral Commission to better monitor donations and investigate suspicious funding.
McFadden stressed that any financial support for political parties should be clearly traceable from source to recipient.
“It’s crucial that we understand who is providing that funding and why.”
His remarks reflect a growing concern within government that existing political finance laws may no longer be fit for the digital age.
Global Scrutiny Over Crypto’s Role In Campaign Funding
The UK isn’t alone.
Several countries have already taken steps to restrict or ban crypto donations in politics.
In 2022, Ireland moved to ban all crypto contributions to political entities as part of a broader campaign to shield democracy from foreign meddling and misinformation.
The legislation also introduced new transparency requirements for political parties.
In the United States, the picture is more fragmented.
States like Oregon, Michigan, and North Carolina have banned crypto donations outright, citing concerns over traceability and transparency.
Others, such as California, initially banned them but reversed the decision in 2022 to allow digital donations again.
In the lead-up to the 2024 election, crypto-linked political spending in the US reportedly reached $134 million.
Meanwhile, El Salvador — where Bitcoin is legal tender — has no restrictions on crypto contributions.
Local civic groups have raised alarm about the lack of safeguards, warning the country’s open policy could invite external manipulation of its political system.
Digital Assets Rise In The UK But Trust Gaps Remain
Nearly 12% of adults in the UK now own crypto assets — more than double the figure from 2021 — fuelling urgency among lawmakers to close regulatory gaps before crypto becomes a common tool for campaign fundraising.
While some view digital donations as a symbol of modern politics, many officials see them as a potential loophole for money laundering and covert influence.
Anti-corruption charity Spotlight on Corruption echoed this sentiment, warning in its report that the current regulatory framework is too weak to handle the anonymity crypto enables.
The Real Risk Isn’t Just The Technology — It’s The Vacuum Of Oversight
The crypto debate reveals a larger issue: the failure of regulatory frameworks to keep pace with fast-moving digital innovations.
When parties can raise money from virtually anywhere, with no clear link to a human identity, traditional rules no longer apply.
The UK’s hesitation to embrace crypto donations is not anti-innovation — it’s a defence of democratic transparency.
If democracy is to survive the digital age, lawmakers may need to act not just faster, but smarter.
Alex
Catherine
Miyuki
Kikyo
Weiliang