The Volta Card may go down as one of the great innovations of modern times, due to its capacity to take cryptocurrency deposited in a wallet and convert it into fiat currency, enabling you to spend as if you were using any other credit card and to do so seamlessly across borders.
In doing so, it made possible mainstream spending when previously the use of crypto to make direct purchases was largely restricted to luxury goods such as expensive watches, top-of-the-range cars, jewellery and upmarket hotel stays.
As such, the development of a card that can turn crypto into fiat and normalise it for a wide array of transactions has been a major game-changer. If you have crypto, you may dream of all the things you can spend it on, even though many of them are anything but dream purchases.
Is A Restriction On Crypto Spending Coming To The UK?
In view of this development, you might wonder if the capacity to spend crypto however you like is set to become practically unlimited. The answer, however, appears to be no.
The first sign of this may be emerging in the UK. The idea of making donations to political parties using cryptocurrency is a novel one, but this is what Reform UK have done, accepting a donation worth £9 million from British-born, but Thai-based, crypto billionaire Christopher Harborne.
For the UK’s most high-profile ‘challenger party’, which has been leading in the opinion polls for several months and hopes to smash a century-old Conservative-Labour duopoly, this was quite a moment.
Even if the sum had been sent in pounds sterling, it would still be the largest individual donation made to a British political party.
This has sparked calls for an investigation amid claims that using crypto this way could be somehow nefarious.
The Liberal Democrats have already raised the issue with the Electoral Commission, amid suggestions that the donation might influence policy towards cryptocurrency if Reform maintains its poll lead and wins the next election.
Why Might Political Donations Be A Crypto Problem?
Among others objecting is the Royal United Services Institute, which recently produced an article arguing against permitting crypto donations on the basis that the borderless nature of such transactions made elections and political activity too open to foreign influence.
With the Labour government already planning a new elections bill, it has been suggested that a provision may be inserted into it to prohibit crypto donations to political parties.
Some may ask whether this is a restriction on the ability of those who have successfully invested in crypto to use it as they wish, while others may argue it is necessary for the particular circumstances of politics, amid the need for openness and certainty that policy decisions are not being made through influence bought.
If a crypto ban of this kind is made, it may be no surprise. A key feature of crypto is the fact that it exists outside the standard banking and monetary system.
This has been part of its appeal, but it has also made decision-makers wary and occasionally suspicious about the ramifications of this.
There are different possible responses to this:
· Allow a deregulated crypto landscape to persist
· Oppose and restrict the wide use of cryptocurrency in transactions
· Ban the use of crypto in a few specific circumstances, such as political donations
· Bring in more regulation to enable expanding crypto use to be beneficial
How Has the USA Approached Crypto Regulation?
A notable example of how some have changed their approach to cryptocurrency is that of Donald Trump. In his first term as president, he was sceptical of the value and importance of crypto.
By the time he was confirmed as the Republican candidate to run for a return to the White House, he had been converted to a pro-crypto position.
That stance, however, was not one of laissez-faire towards crypto, but active engagement that has involved efforts to put together the sort of regulatory regime that would be appropriate for cryptocurrency.
This has included legislation like the GENIUS Act, designed to create new consumer protections as well as tying Stablecoins to the US Dollar.
The UK may indeed ban political donations in crypto, but that does not provide any reason to assume that there will be widespread prohibitions on its use.
In particular, there is no suggestion at present that business transactions may be affected. Indeed, better and more comprehensive regulation could help ensure these are safer and more viable.
As such, political donations might become a no-go area for crypto, at least in the UK. But other crypto regulations may help expand the use of crypto transactions elsewhere. In this environment, the Volta card will continue to become ever more useful.