Reform leader Nigel Farage has published his proposed Cryptoassets and
Digital Finance Bill, which he plans to enact, should he become Prime Minister.
The proposed bill includes a raft of changes which is aimed at making the United Kingdom the world’s premier hub for cryptocurrency and blockchain innovation.
To demonstrate its seriousness, Reform UK has also announced it will be the first UK political party in history to accept donations in Bitcoin, Ethereum, as well as other cryptocurrencies.
“Freed from the shackles of EU regulatory quagmire, the Bill leverages the UK’s regulatory sovereignty, empowering it to combine competitive taxation, light-touch supervision and institutional adoption. Advantages
only possible because the UK now controls its own financial rulebook,” the party said.
“This Bill is proof that a Reform government will prioritise the privacy and financial sovereignty of all citizens of the United Kingdom.”
The proposals are outlined in more detail below.
10% Capital Gains Tax on Crypto
A single 10% CGT rate will apply to gains on cryptocurrencies and eligible blockchain-based digital assets, overriding higher rates in existing tax law while preserving the tax-free allowance for chargeable gains.
It is anticipated that this will result in a significant increase in revenue for HM Treasury, as a result of onshoring, increased transactions and tax compliance.
Two-Year Regulatory Sandbox
The Financial Conduct Authority, with HM Treasury, will run a two-year Blockchain Financial Services Sandbox open to large financial institutions and designated firms, granting temporary relief from selected rules while maintaining core AML/CTF safeguards.
Within 90 days of the sandbox ending, regulators must publish findings and propose permanent reforms.
Banking Non-Discrimination Duty
It will be illegal for Banks and payment providers to deny or withdraw services solely because a customer deals in lawful cryptoassets. The burden of proof lies on the bank to show any refusal is for legitimate, non-crypto reasons.
This will mean no bank can de-bank a consumer just because they wish to own, trade or transact in crypto.
Sovereign Bitcoin Reserve Fund
Treasury will create and manage a Bitcoin Reserve Fund as part of the UK’s official reserves, diversifying holdings, signalling confidence in digital assets and capturing potential long-run appreciation. Quarterly public reporting and an annual independent audit will ensure transparency.
Paying Taxes in Cryptocurrency
HMRC must build systems to accept Bitcoin (and other approved crypto) for tax liabilities, using HMRC published GBP exchange rates at the time of payment. Crypto collected can be converted into sterling or added to the Bitcoin Reserve Fund.
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