Nigel Farage Proposes UK Bitcoin Reserve and Crypto Tax Cuts

Reform UK leader Nigel Farage has unveiled an ambitious plan to establish a Bitcoin reserve at the Bank of England and slash capital gains taxes on crypto assets to 10%. The proposals, announced at Bitcoin 2025 in Las Vegas, aim to position Britain as a global leader in digital asset innovation through sweeping regulatory reforms.

The Crypto Assets and Digital Finance Bill would mark one of the most radical pro-crypto shifts by a major UK political party. Farage claims these measures could attract £40 billion in crypto investment within five years while preventing talent and companies from fleeing to more crypto-friendly jurisdictions like Dubai and Singapore.

Recent polling shows Reform UK gaining momentum with 29% voter support, potentially upending Britain’s political landscape. The party has already begun accepting campaign donations in Bitcoin, Ethereum, Solana, and USD Coin – a first for any European political movement.

The Bitcoin Reserve and Regulatory Overhaul

Central to Farage’s proposal is creating a national Bitcoin reserve managed by the Bank of England. This would formalize cryptocurrency as part of the UK’s financial infrastructure while providing institutional legitimacy. The UK currently holds 61,245 BTC ($6.4 billion), ranking third globally behind China and the US according to Bitcoin Treasuries data.

Tax Incentives and Anti-Debanking Measures

The plan would reduce capital gains tax on crypto from 24% to 10%, making the UK’s rate among the lowest in developed nations. Farage argues this “fair tax” approach will boost compliance and investment. Simultaneously, banks would be prohibited from closing accounts solely due to crypto transactions – addressing growing concerns over financial exclusion.

Political Strategy and Crypto Donations

Reform UK’s decision to accept crypto donations signals direct appeals to younger, tech-savvy voters. Recent surveys show 25% of Britons under 30 hold digital assets. The party has partnered with BitPay to facilitate contributions across major blockchain networks.

Farage strongly opposes central bank digital currencies (CBDCs), calling them “tools of financial surveillance.” This stance contrasts with the Bank of England’s ongoing digital pound research, creating potential policy clashes with traditional institutions.

The proposals face skepticism from mainstream parties, with Chancellor Rachel Reeves warning against “reckless financial experiments.” However, crypto advocates praise the vision, with CoinShares CEO Jean-Marie Mognetti calling it “the most coherent crypto strategy from any Western leader.”

Implementation hinges on Reform UK winning the next general election, which must occur by August 2029. Current polling suggests a potential coalition government scenario where crypto policy could become a key negotiating point.

Market analysts suggest successful implementation could:

• Increase Bitcoin’s UK adoption rate by 300%
• Attract 50+ crypto firms to London
• Generate £2.8 billion in annual tax revenue by 2030

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The proposal’s emphasis on debanking protections and tax incentives could reshape Britain’s financial landscape. If enacted, these measures may pressure other G7 nations to accelerate their own crypto regulatory frameworks.

Bitcoin Reserve

A national treasury strategy where governments hold Bitcoin as part of their monetary reserves.

CBDC

Central Bank Digital Currency – a government-issued digital currency monitored through centralized ledgers.

Debanking

The practice of financial institutions denying services to customers based on perceived risk factors.

Capital Gains Tax

A levy on profits from the sale of assets, including cryptocurrencies.