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UK committee pushes for crypto donation ban over foreign influence risks

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UK committee pushes for crypto donation ban over foreign influence risks

UK lawmakers are raising concerns over the risks tied to crypto donations, which they claim can open the door to foreign influence in political financing.

Summary

  • UK parliamentary committee calls for an immediate ban on crypto donations to political parties, citing risks of foreign influence and gaps in oversight.
  • Lawmakers warn that tools such as mixers and AI-driven micro-donations could obscure fund origins and bypass existing reporting thresholds.
  • Experts remain divided, with some pointing to transparency within regulated systems while others caution that a ban may push activity offshore without resolving core risks.

In its latest report, the Joint Committee on the National Security Strategy urged a moratorium on crypto donations to political parties.

According to the committee, such contributions pose an “unnecessary and unacceptably high risk to the integrity of the political finance system.”

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They argued that the government should amend the Representation of the People Bill, which entered committee stage on Wednesday, to prohibit such donations until stronger safeguards are in place. The committee called for an immediate ban on crypto-based political funding.

“Few things are more important than maintaining trust in our politics. The pervasive idea that politicians can be ‘bought’ through foreign money is increasingly corrosive,” Chair of the Joint Committee on the National Security Strategy, Matt Western MP, said.

The report discussed how crypto tools such as mixers, privacy coins, and cross-chain swaps can obscure the origin of funds. Meanwhile, it raised concerns over how AI could enable automated “micro-donations” that allow large contributions to be split into smaller transfers that fall below the reporting threshold under existing electoral law.

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Experts consulted by the committee have argued that crypto transactions can remain transparent within regulated systems, while others have warned that a blanket ban could push activity offshore without addressing the underlying risks.

However, the committee report concluded that the “opportunity to evade rules is too high” under current oversight.

Regulatory pressure grows

Last month, some Members of Parliament in the United Kingdom, led by Matt Western, sent a letter to the Secretary of State for Housing, Communities and Local Government, Steve Reed, where it raised similar concerns around foreign interference risks.

The letter urged the Electoral Commission to introduce interim safeguards by only allowing political parties to process crypto donations through FCA-registered Virtual Asset Service Providers and ensuring there is high confidence in identifying the ultimate source of funds.

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Among other suggestions, lawmakers proposed prohibiting the use of crypto mixers or tumblers, alongside stricter source-of-wealth checks and faster conversion of donations into pounds sterling.

According to a BBC report, Reform UK was among the first parties at Westminster to accept crypto donations. However, details on the party’s official website state that it does not accept anonymous donations and applies standard compliance checks to verify donor eligibility.

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Crypto World

Crypto Cards Aren’t The Future, But Onchain Credit Is

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Crypto Cards Aren't The Future, But Onchain Credit Is

Opinion by: Vikram Arun, co-founder and CEO of Superform

Crypto cards aren’t the future of payments. They’re a temporary interface for a world that hasn’t fully accepted cryptocurrencies.

They rely on banks as issuers, Visa or Mastercard as gatekeepers, and compliance rules that look exactly like TradFi. 

In most cases, crypto is sold into idle USD, the assets stop earning and every swipe creates a taxable event. 

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That’s not innovation. That’s a debit card with extra steps. 

As digital banks built with blockchain rails scale, crypto cards that behave like debit cards will become obsolete, replaced by systems that treat cards as a thin interface on top of robust onchain credit.

The problem with current crypto cards

To understand why this shift is necessary, consider what happens with current crypto cards. When systems force users to liquidate holdings to spend, they reinforce the paradigm crypto was meant to escape: the false choice between liquidity and ownership. 

Debit-style crypto cards recreate this same trade-off because they require assets to become spendable balances, which halts yield and makes the system structurally negative-sum without subsidies. 

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The IRS treats converting cryptocurrency to fiat currency as a taxable disposal, meaning each coffee purchase triggers capital gains reporting and permanently removes assets from productive use. Card issuers typically earn 1% to 3%, plus a flat fee per transaction, from interchange fees. The infrastructure looks decentralized on the surface, but the dependencies run deep.

Onchain credit fixes these issues

Instead of selling assets to spend, onchain credit enables people to deposit yield-bearing assets, open a credit line and spend against it. When people swipe the card, their debt increases, but their assets keep earning. Nothing is sold unless the person fails to repay. If the position falls below governance-defined parameters, liquidation is deterministic and transparent. This shift toward wallet-native credit shows onchain credit moving from concept to practice. 

In this model, spending doesn’t reduce ownership; it increases debt. Collateral continues to compound until the credit line is repaid or liquidated. There are no forced conversions and no idle balances. Yield-bearing stablecoins currently offer about 5% yield, and DeFi protocols range from 5% to 12%, depending on demand and token incentives.

Users holding these assets in credit accounts keep earning while maintaining spending power.

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Any earning asset can be collateral

This shift from debit to credit fundamentally changes what’s possible. Once credit becomes the primary primitive, the question stops being “what can I spend?” and becomes “what can safely secure my credit?” Eligibility is no longer about whether an asset can be instantly liquidated into cash. It’s about whether it can be priced continuously, risk bounded and unwound deterministically.

This allows productive assets to compete for inclusion. Vault shares, yield-bearing dollars, US Treasury-backed assets and strategy positions are first-class collateral that don’t need to be converted into idle balances. These assets remain productive until liquidation becomes required. When assets keep earning, users don’t have to choose between liquidity and yield, credit lines become cheaper to maintain and protocols earn from management and performance, not interest spreads.

The card is just an interface

The card is not the product. A card is simply a consumer-facing compatibility layer, a thin authorization surface, and not the source of truth. What actually matters is the credit line itself: the ability to price a user’s onchain balance sheet and decide, in real time, whether a spend should be allowed.

Related: Visa crypto card spending soars 525 percent in 2025

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Cards serve merchants and consumers. Once credit is the primitive, however, interfaces become interchangeable. Software and autonomous agents can already request payment programmatically. Whether through cards or APIs, the underlying question is the same: Is this spend authorized against the user’s credit?

If credit logic lives within the card, people remain locked into interchange fee structures, closed payment rails and rigid KYC requirements. If credit lives onchain, cards become optional. Collateral stays in user-controlled accounts, spending is authorized in real time and liquidation is deterministic. 

Managing risk through transparency

Of course, this system raises questions about safety. The most immediate objection is volatility. If collateral can fluctuate in value, what protects people from being liquidated while they are buying groceries?

Governance sets conservative loan-to-value ratios in advance, ensuring users can only borrow against a fraction of their collateral. As collateral earns yield, this buffer grows automatically. Pricing happens continuously, not at arbitrary intervals, and liquidation triggers are transparent from the beginning.

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Traditional credit obscures risk through adjustable interest rates, surprise fees and terms buried in legal documents. Onchain credit makes risk explicit. Governance-set parameters mean the community decides what’s acceptable, not a bank’s risk committee behind closed doors.

The path forward

The answer to managing this risk lies in how the system is governed. Governance controls which assets can be used as collateral, how they’re priced, acceptable risk levels and when liquidations occur. People opt in by depositing collateral, and from that point on, the protocol enforces the rules without blanket access to funds or quietly changed parameters.

Crypto cards will not disappear because they failed. They will disappear because they succeeded by bridging crypto into a world that still runs on legacy rails. As wallets improve and crypto-native payments become standard, spending won’t require banks, issuers or card networks at all. Interfaces will change. Payment rails will evolve. But onchain credit will remain: the ability to spend without selling, to keep assets productive and to enforce risk transparently.

Cards are an interface. Credit is the system.

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Opinion by: Vikram Arun, co-founder and CEO of Superform.