The Home Office is reportedly eyeing the sale of at least £5 billion worth of seized Bitcoin as the chancellor faces pressure to plug a £20 billion shortfall by the autumn.
According to a report by The Sunday Telegraph, the government body, which is working with the police on the sale, is also planning to create an official storage system for cryptocurrencies designed to facilitate the sale of Bitcoin and other digital assets.
The Bitcoin stash is the result of a 2018 fraud bust in which 61,000 BTC was seized.
The move comes after economists said last month that chancellor Rachel Reeves may need to plug a £20 billion shortfall following the announcement of her Spending Review.
At the time, Yael Selfin, chief UK economist at KPMG, told City AM that a UK growth forecast of 1.2 per cent would see public sector revenues falling under the chancellor’s expectations because of higher borrowing costs driven by high gilt yields and stalling interest rate cuts.
“Looking ahead to the Autumn Budget, by cementing in substantial increases in departmental spending, Reeves has made further tax rises look increasingly inevitable,” she said. “The recent U-turns on welfare and higher borrowing costs mean that the chancellor may need to find an additional £20 billion in taxes later this year.”
Speaking about the planned sale of the country’s confiscated Bitcoin stash, chief executive of global financial advisory deVere Group Nigel Green warned that while offloading the crypto could offer short-term relief, the move could “echo past errors” and undermine a longer-term strategy.
“Turning these assets into instant cash is tempting, but it risks repeating historical errors,” said Green, referring to previous government asset sales that have gone sour.
The chief exec pointed to gold sales in the late 1990s as a cautionary tale, where the assets were sold at depressed prices, leading to criticisms over heavy losses when bullion rose.
“They sold gold in a dip, only to regret it years later,” continued Green. “We risk replaying that error with Bitcoin.”
The reports come a month after the Financial Conduct Authority (FCA) said it is proposing to lift the ban on crypto exchange traded notes (cETNs) for retail investors.
The move would mean that cETNs could be sold to individual consumers in the UK, rather than just professional investors, if they are traded on an FCA-approved investment exchange.
