UK considers Bitcoin sale to plug budget gap
Bitcoin seized in 2018 could now help fund public spending, but experts warn of long-term losses.
Chancellor Rachel Reeves is reportedly considering the sale of over £5 billion in seized Bitcoin to help reduce the UK’s growing fiscal deficit. The Treasury is under pressure to find alternative revenue sources amid soaring borrowing costs, high inflation, and sluggish growth.
The Bitcoin in question was mostly confiscated in 2018 during a crackdown on a Chinese Ponzi scheme. Since then, its value has risen dramatically, with initial holdings worth around £300 million now estimated at more than £5 billion.
The assets were linked to convicted money launderers, including Jian Wen, and are currently held by UK law enforcement.
While the sale could help avoid tax increases or spending cuts, critics warn of repeating past mistakes. Comparisons have already been drawn to Gordon Brown’s heavily criticised gold sales in the early 2000s, which resulted in billions in missed profits.
There are also unresolved legal concerns about returning funds to victims of the fraud.
Some observers argue the UK should consider holding the Bitcoin as a strategic reserve, in line with countries like El Salvador. Analysts note that the US also sold off seized Bitcoin from 2014 to 2021, missing out on a potential $21 billion gain.
If the UK follows through with the sale, many believe it could prove to be one of the most short-sighted fiscal moves in recent history.
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