Seven senior Labour MPs who chair parliamentary select committees have called on the government to ban political donations made in cryptocurrency, warning that digital assets risk obscuring the true source of political funding and could open a route for foreign interference in UK elections.
The MPs made the request in a joint letter ahead of the government’s forthcoming elections bill, expected to set out wide-ranging changes to electoral law and political finance, including plans to lower the voting age to 16.
The committee chairs argue that while political parties may be able to record the sterling value of a crypto donation at the point it is received, the underlying origin of the funds can be difficult to establish and verify in practice. They say this creates vulnerabilities for the UK’s political finance system, particularly at a time when ministers have pledged to strengthen protections against covert overseas influence.
Liam Byrne, the Labour MP who chairs the Business and Trade select committee and is a leading signatory to the letter, has previously urged tougher transparency requirements in party funding. In their latest intervention, the group is calling for an outright statutory ban rather than tighter guidance or additional compliance checks.
Under current rules, cryptocurrency donations are not explicitly prohibited. The legal framework for political finance sits largely under the Political Parties, Elections and Referendums Act 2000 (PPERA), which requires parties to accept donations only from “permissible” sources, such as individuals on the UK electoral register and UK-registered companies carrying on business in the UK. In practice, however, campaigners and some regulators have warned that the checks required to establish permissibility and traceability can be harder to enforce where digital assets are involved.
Those backing a ban say cryptoassets can be transferred quickly, divided into many small payments and routed through digital wallets in ways that make it challenging to establish who ultimately provided the money. They also point to the risk of “micro-donations” split into sums below reporting thresholds, which could reduce public visibility of funding patterns even where a party believes it has complied with disclosure rules.
The Electoral Commission has previously said crypto donations are lawful if the donor is permissible, but has flagged higher risks around enforcement and verifying the source of funds, particularly compared with conventional bank transfers. Any prohibition would require primary legislation, placing the issue firmly in the scope of the elections bill now being finalised by ministers.
Government officials have indicated in recent months that they recognise the concerns but may struggle to include a workable ban immediately, citing the technical complexity of drafting rules that cannot be circumvented and which can be enforced consistently. The government is already expected to propose tighter measures aimed at other perceived vulnerabilities in political finance, including the use of shell companies and unincorporated associations.
Pressure around crypto donations has grown since Reform UK, led by Nigel Farage, began accepting cryptocurrency contributions, a move that intensified scrutiny of how existing rules apply to digital assets. Reform UK has presented its approach as modernising fundraising, but critics say it risks weakening transparency by introducing an asset class associated with anonymous or pseudonymous transactions.
Campaign group Spotlight on Corruption has backed calls for stronger restrictions, arguing that crypto donations could become an attractive route for those seeking to conceal the origins of political funding. The group and supportive MPs have linked the issue to wider concerns about loopholes that could allow overseas money to be channelled into UK politics, even where formal rules require donations to come from permissible sources.
The row comes as ministers prepare a legislative package that is expected to include significant changes beyond political finance. The elections bill is widely anticipated to confirm plans to extend the vote to 16 and 17-year-olds, a move the government has framed as an update to democratic participation. However, the emerging debate over crypto donations suggests that party funding rules could become one of the most contested areas of the bill’s passage through Parliament.
In July last year, Cabinet Office minister Pat McFadden said there was a strong case for considering a ban on crypto donations because of traceability concerns. Since then, ministers have continued to face calls from across politics and civil society to ensure that reforms keep pace with new forms of money and new risks to electoral integrity.
It is not yet clear whether the government will adopt the select committee chairs’ proposal in the initial text of the bill or seek to address it later through amendments during the bill’s Commons and Lords stages.