New research shared with Cointelegraph shows that the UK’s decision to halt political donations in crypto clashes with younger people’s growing awareness of digital assets.
Research by Coinbase Institute and JL Partners, shared with Cointelegraph, found that cryptocurrencies, led by Bitcoin (BTC), have overtaken established banking products as the entry point for many adolescent people to understand money, risk and financial opportunities. Just 43% recognize an individual savings account with stocks and shares and 20% a Help to Buy ISA, reflecting what the report describes as a “crypto first, TradFi second” reordering of financial skills.
The findings come as the UK moves ahead with plans for a moratorium on political donations in crypto, highlighting a potential disconnect between the way adolescent people engage with finances and the way Westminster regulates them.
Coinbase’s vice president of international policy, Tom Duff Gordon, told Cointelegraph that the UK “has an estimated 1.3 million new voters” as the government introduces legislation to lower the voting age to 16, adding that cryptocurrencies are becoming an issue that political parties need to include on their agenda.
Nearly half of adolescent people said they would be more likely to trust a political party if it demonstrated an understanding of cryptocurrency and blockchain technology, while 26% said they would be more likely to support a party that supports pro-innovation crypto policies. More people under 25 now recognize Bitcoin than any ISA, savings bond or other legacy savings product, with awareness at 65%, making BTC the most recognizable financial product in this group.
Related: Leading UK labor lawmakers push to ban political donations made in crypto
Crypto donations hold up jars of traceability claims
This puts crypto policy on a potential collision course with the current moratorium on donations. On LinkedIn post last week, Duff Gordon argued that crypto assets “have the prospect of perfect traceability,” with transactions being recorded on-chain and potentially much more see-through than fiat currency.
Related: The UK’s central bank is starting to lean towards stablecoins, but says it lacks industry input
He noted that the UK’s Financial Conduct Authority already uses a system to register crypto companies to enforce anti-money laundering (AML) and counter-terrorist financing (CTF) rules, and suggested requiring crypto political donations to be made via FCA-registered companies, with the same restrictions and admissibility rules that apply to cash. He said the pause could perpetuate the stigma around cryptocurrencies and delay a more proportionate regulatory approach.
Parties ignore adolescent cryptocurrency voters at their peril
It is becoming increasingly hard for politicians to ignore this message. The Right Honorable Alun Cairns, former Cabinet Minister and Vice-Chair of the Blockchain All Party Parliamentary Group, told Cointelegraph that the fresh generation of voters has “fundamentally different expectations of money, technology and opportunity” and that he will “reward those who understand this change.”
He said that digital assets and financial innovation are becoming key to winning over future generations and that “as a Conservative, my party must keep pace with changing demographics.”
The survey also found that around two-thirds of adolescent people want the government to offer financial education on cryptocurrencies, while 43% said they would trust the party more if it embraced fresh technologies such as cryptocurrencies, representing 58% of Reform voters and 46% of Labor voters.
Duff Gordon added that cryptocurrency supporters are an “influential electorate” and parties that do not engage with them risk losing relevance to future voters.
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