A senior UK parliamentarian is urging the government to temporarily halt cryptocurrency donations to political parties, citing a growing risk that foreign states could use digital assets to influence British politics.
Matt Western, who chairs the influential Joint Committee on the National Security Strategy, made the recommendation in a formal letter to Steve Reed, the Secretary of State for Housing, Communities and Local Government. Western proposed amending the upcoming Representation of the People Bill to include a “temporary moratorium” on crypto contributions. This freeze would remain in place until the Electoral Commission issues clear, statutory guidance on how such donations should be regulated.
“We are concerned that foreign state intent to interfere in UK political finance may grow out to the next election,” Western stated in his letter. He linked this threat directly to the UK’s geopolitical stance, adding: “As the security environment worsens and the UK’s military role in Europe grows, the value of influencing the UK’s political positions, for example on Ukraine, or US/EU relations, is likely to increase.”
From Full Ban to Temporary Pause
This call for a moratorium follows an earlier, more sweeping proposal. In January, a group of cross-party committee chairs, including Western, advocated for an outright ban on crypto donations to be written into the Representation of the People Bill. They warned that the pseudonymous and borderless nature of cryptocurrencies could provide a covert channel for foreign funding. However, when the bill was introduced to the House of Commons on February 12, it did not contain such a prohibition.
Proposed Safeguards for a Resumption
Western’s letter outlines specific conditions he believes must be met before any moratorium is lifted. He argues that the Electoral Commission’s future guidance should mandate that political parties only accept crypto through services registered with the Financial Conduct Authority (FCA), the UK’s primary financial regulator.
Furthermore, he recommends prohibiting donations that have been routed through “mixers”—services that obscure transaction trails—or that originate from an unidentified source. To prevent parties from holding volatile assets, Western also suggests a rule requiring any received cryptocurrency to be converted into British pounds (fiat currency) within 48 hours.
The next UK general election must be held by August 15, 2029. The Representation of the People Bill is scheduled for its second reading in the House of Commons on March 2, a key stage where amendments, including Western’s proposal, could be debated.
Calls for a Dedicated Enforcement Body
Beyond the immediate moratorium, Western’s letter presents longer-term structural reforms to combat foreign interference in political finance. He identifies a fundamental gap in the current system: a lack of clear, centralized enforcement responsibility.
“Our evidence suggests that there is no clear national enforcement lead for political finance and foreign interference risk. Responsibilities are split across the Electoral Commission, the Metropolitan Police Service, Counter-Terror Policing, the National Crime Agency, MI5 and local police forces,” Western wrote.
To resolve this, he proposes the creation of a dedicated national police unit solely focused on overseeing political finance and investigating foreign interference. This would aim to streamline intelligence and investigative efforts, which are currently dispersed among multiple agencies with different primary mandates.
Western’s package of recommendations also includes: implementing robust source-of-wealth checks for all significant donors; a government review of sentencing guidelines for electoral finance offenses; proposals for higher financial penalties for breaches; and granting the Electoral Commission enhanced compulsory powers to force financial institutions to disclose the ultimate source of donation funds.
The debate over crypto donations was brought into sharper focus last year when Reform UK, led by Nigel Farage, became the first major UK political party to announce it would accept Bitcoin and other cryptocurrency donations from eligible UK-based donors. This move, highlighted at the Bitcoin 2025 conference, underscored the need for regulatory clarity that Western’s letter now seeks to address.
This article is based on a report by Cointelegraph, an independent news outlet covering blockchain technology and digital assets. Cointelegraph’s editorial policy emphasizes accuracy, transparency, and independent verification. Readers are encouraged to consult primary sources. The full editorial policy is available here.
