At a conference in London this week, Reform UK leader Nigel Farage billed himself as “your champion” for digital assets and laid out visions for a platform that would include a flat 10% capital gains tax on cryptocurrencies, the creation of a national Bitcoin reserve worth around £5bn based on seized coins, the suspension of the Bank of England’s Digital Pound project, and optional tax payments in cryptocurrencies.
The proposal reflects three policies related to Donald Trump’s crypto campaign, including opposition to central bank digital currencies, overt collaboration with miners and industry, and White House signals on a digital asset strategy that has made leadership in financial technology a priority for the federal government.
But in the US, the path is clear, with policy rhetoric repeatedly showing up in the flow of spot Bitcoin ETFs supplying massive demand.
The UK policy machine runs on a different clock.
The Bank of England and the Treasury are still in the design and review stages of a potential digital pound and have not decided whether to proceed, according to the Bank of England’s latest progress report last week.
In the short term, attention will be on the boundaries of regulated stablecoins and custody rules driven through consultation, in accordance with the Financial Conduct Authority’s CP25/14.
In parallel, the UK is preparing to allow tokenized investment funds, which would provide a bank- and asset manager-friendly implementation vehicle independent of campaign messaging.
Powers, processes and timing will limit the ability to translate the Reform UK platform into policy.
After the 2024 general election, the Reform Party will win just five seats out of 650, while Labor will rule with a majority.
UK tax rates require a Treasury Bill. The government sets the reserve framework, represented by banks, and primary legislation and secondary instruments are passed through both the House of Commons and the Lords.
Based on the Parliamentary Dissolution and Convocation Act, the next general election will not be held until August 2029.
In this parliament, small parties cannot dictate BOE or HMT policy, and private members’ bills are rarely passed. Even the sympathetic elements of Farage’s program would require ownership by the government of the day.
The numbers behind the headline proposals show what could be at stake if any part of it moves into mainstream policy.
uk bitcoin number
A £5 billion Bitcoin allocation is equivalent to approximately $6.64 billion at a GBPUSD rate of around 1.328, and would mean buying or holding approximately 59,000 to 60,000 BTC at a price of approximately $112,000, which is approximately 0.30% of the current circulating supply.
The UK is already in the pipeline of seized coins, with law enforcement reporting that 61,000 BTC was involved in the 2016 hack.
Although this reservoir makes “reserves by retention” plausible on paper, the Proceeds of Crime Regulation provides for liquidation and compensation by default, which means that governments need explicit legal authority to hold seized assets in reserves.
In terms of taxes, virtual currencies fall within the scope of the capital gains regime. A flat 10% would reduce the effective tax rate for high-rate taxpayers and change the UK’s behavior on on-ramping, loss harvesting and holding periods, but it would still require government backing in the Finance Bill.
For market participants who follow policy channels rather than podiums, the plumbing that shapes the flow is already in motion.
Stablecoin issuance and custody rules, coupled with a route to tokenized funds, create institutional rails that can expand liquidity in the pound and reduce operational friction for market-neutral and basis strategies.
The UK channel is different from the US ETF route, but the impact could be cumulative as regulatory infrastructure expands. A campaign message therefore only becomes important if it is adopted by the ruling party or if it intersects with processes already in place by the FCA and BoE.
A transatlantic comparison helps explain Farage’s rhetorical choices.
President Trump’s stance on the Federal Reserve’s block on digital currencies, public courting of miners, and federal messaging on digital asset leadership has given the industry a clear narrative.
The transmission mechanism was then implemented through spot ETF creation and redemption, captured in weekly flow data.
The UK does not yet have a comparable domestic spot Bitcoin ETF channel, so the short-term driver of UK activity will be regulated custody, bank connectivity, and tokenized fund wrappers rather than government demand.
Sovereign Bitcoin allocations in the range cited by Farage would appear on a global ledger of nation-state-related holdings.
The US government controls a large pool of seized BTC, tracked by on-chain analysts, while El Salvador has thousands of coins on its balance sheet. With 61,245 BTC held, the UK ranks among the top holders by addressable size.
While the impact on monetary policy will be limited by the size of the UK’s overall foreign exchange reserves and the World Bank’s inflation mandate, the signs are clear and we need to focus on legal, process and institutional objectives.
If Reform Britain wins a majority in the next UK general election, it will be an electoral swing unprecedented in modern British political history.
The party only won five seats in the 2024 general election, so going from five to a parliamentary majority (at least 326 out of 650) would be more than any single party has ever gained in a single election.
The most significant increases to date are:
- Labor’s 2024 surge: +211 seats (2019 to 2024).
- The highest number of seats changed in a UK general election was in 2024, with 303 seats. Previous high water marks were 289 (1931) and 279 (1945).
The market context provides a canvas for interpreting politics.
Bitcoin price is trading around $111,948 at the time of writing, with intraday highs around $115,948 and lows around $110,099.
A policy impulse to withhold approximately 60,000 BTC from circulation or purchase the same amount over an extended period of time would change the trend of flows around the margin.
The enforcement route is important, as is the legal basis for holding seized assets rather than auctioning them. These decisions were made by the administration and the World Bank within the existing framework, and not by small parties outside the government.
Below is a compact snapshot for readers looking at the numbers associated with Mr Farage’s proposals.
| metric | shape | Source/Memo |
|---|---|---|
| Bitcoin price (spot) | $111,948 | Snapshot from the conference day |
| Intraday high and low prices | $115,948, $110,099 | Conference date range |
| 5 billion pounds reserves, equivalent to US dollars | ~$6.64 billion | Pound Dollar ≈ 1.328 |
| Implied BTC is approximately $112,000 | ~59,000–60,000 BTC | Approximately 0.30% of circulating supply |
| BTC seized in UK case | ~61,000 BTC | Crown Prosecution Service |
From here on, three signposts will determine your path forward.
First, the BoE and HMT’s timelines for digital sterling and payments modernization will indicate whether the scope and pace of design work changes, the Bank of England said.
Second, according to the FCA, the FCA’s stablecoin and custody rulemaking will determine how quickly the GBP rail evolves, with final rules and final oversight moving cryptocurrency activity to more standardized boundaries.
Third, a decision by the major political parties to adopt elements of Farage’s framework will appear in the wording of manifestos and draft finance bills long before they appear in government reserve data.
For now, the combination of Labour’s majority, standard legislative process and existing regulatory workstreams means that UK cryptocurrency policy will continue along the lines of the FCA and BOE rather than the Reform UK platform.