Big benefits cuts are imminent – here’s what to expect and why it could be just the start

Published

12 hours ago

March 18, 2025

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Those with “milder mental health” issues and “lower-level physical conditions” could see their disability benefits cut, as the government looks to shave £6bn off the welfare bill.

Liz Kendall, the work and pensions secretary, is expected to target sickness and disability benefit payments for savings today, which comes ahead of the spring statement next Wednesday.

Politics latest: Welfare reforms ‘imminent’

Her welfare reform green paper will arrive after Downing Street insisted there is a “moral and an economic case for fixing our broken system”.

Government figures argue the rising sickness and disability bill, which has ballooned since the pandemic, is unsustainable and will “leave the welfare state losing legitimacy” in the eyes of the wider public if not dealt with.

The cuts come as the chancellor eyes a hole in the public finances on the back of lower than expected growth and rising borrowing costs, with the £9.9bn headroom she had at the budget in October now wiped out.

Rachel Reeves’ self-imposed fiscal rules mean day-to-day government spending must be covered by tax revenue by 2029-30, which leaves her needing billions of pounds in spending cuts (after ruling out further tax rises, her other option).

What changes should we expect?

Ms Kendall is expected to target personal independence payments (PIP) – one of the main forms of disability benefits for those with long-term illnesses or disabilities – amid a spike in claimants.

The PIP bill has grown from £13.7bn a year before the pandemic to £21.8bn in the current financial year, and is set to increase to £34.1bn by the end of the decade.

The number of people claiming this disability benefit is projected to more than double from two million to 4.3 million.

The work and pensions secretary will tell MPs that Labour will protect those who have a serious condition and can’t work, and the government’s rowed back from plans to freeze PIP payments after backlash from its backbench MPs.

These payments are now expected to rise in line with inflation, but the eligibility criteria will be tightened to whittle back the number of people eligible to claim.

One government figure told me it would result in some conditions – such as “milder mental health” or “lower-level physical conditions” – being ineligible for PIP.

But they stressed that those with more severe conditions and who are never going to be able to work would be protected and cared for.

The key principles driving reforms

The changes are likely to draw criticism from some MPs, though one senior Labour source said they didn’t think there would be any ministerial resignations over the benefit announcements.

Another Labour figure told me they would be “massively shocked” if there were resignations.

However, a number of Labour MPs have voiced their concerns, as has Greater Manchester Mayor Andy Burnham.

In a bid to assuage MPs, the work and pensions secretary is also expected to earmark £1bn of savings into employment support programmes as she frames the reforms around three clear principles.

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The first will be to prevent people from falling into long-term economic inactivity with a better support offer to get people back into work quickly.

The second will be to change the incentive systems to move people away from welfare dependency.

This could see Ms Kendall slash the highest level of incapacity benefit for working age people who have an illness or disability that limits their ability to work, while increasing the basic rate of support for those out of work (universal credit).

This is because the lower level of unemployment benefit has led to more people claiming for additional incapacity and disability benefits, while disincentivising them to try to find work.

The government will also announce a “right to try” scheme, allowing those on incapacity benefits to try returning to work without the risk of losing their benefits, as happens in the current system.

‘I don’t think they go far enough’

But with one in 10 working age people claiming sickness benefits, and one in eight young people not in education, employment or training, the reforms could be just the start of bigger changes – and potentially bigger political battles.

The cost of long-term sickness and disability benefits for working-age people has risen by about £20bn since the pandemic to about £48bn, and is forecast to hit almost £100bn by 2030.

“People are trapped on benefits and the bill is getting out of hand,” said one government figure.

“We are currently spending more than three times the annual policing bill on these benefits. It’s getting out of hand.

“I don’t think the reforms go far enough, and I don’t think people have clocked the size of the numbers going on here.”

Politics

83% of institutions plan to up crypto allocations in 2025: Coinbase

Published

2 hours ago

March 18, 2025

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83% of institutions plan to up crypto allocations in 2025: Coinbase

Institutional investors are increasingly bullish on cryptocurrency, with 83% saying they plan to up crypto allocations in 2025, according to a March 18 report by Coinbase and EY-Parthenon.

Already, nearly three-quarters of firms surveyed said they hold cryptocurrencies other than Bitcoin (BTC) and Ether (ETH), and a “significant majority” said they plan to boost crypto allocations to 5% or more of their portfolios, the report said.

They are motivated by the view that “cryptocurrencies represent the best opportunity to generate attractive risk-adjusted returns over the next three years,” according to the report.

Coinbase, the US’ largest crypto exchange, and EY-Parthenon, a consultancy, based the findings on interviews with more than 350 institutional investors in January.

Among institutional altcoin holdings, XRP (XRP) and Solana (SOL) are the most popular, the survey found.

Altcoin ETFs incoming

Altcoin holdings could rise even further if US regulators approve planned exchange-traded fund (ETF) listings this year.

Asset managers are awaiting a greenlight from the US Securities and Exchange Commission to list more than a dozen proposed altcoin ETFs.

Litecoin (LTC), SOL and XRP are seen as the most likely to see near-term approval, according to Bloomberg Intelligence.

On March 17, the Chicago Mercantile Exchange (CME) Group, the largest US derivatives exchange by volume, launched futures contracts tied to SOL, marking a significant step toward institutional adoption of the altcoin.

Stablecoins and DeFi take off

Meanwhile, stablecoins continue to see institutional uptake, with 84% of respondents either holding stablecoins or exploring doing so, the survey found.

According to the report, institutions are using “stablecoins for a variety of use cases beyond just facilitating crypto transactions, including generating yield (73%), foreign exchange (69%), internal cash management (68%), and external payments (63%).”

In December, investment bank Citi said stablecoin adoption will accelerate onchain activity, including in decentralized finance (DeFi).

The survey found that only 24% of institutional investors currently use DeFi platforms, but that figure is expected to grow to nearly 75% in the next two years.

“Institutions are attracted to DeFi for myriad reasons, citing derivatives, staking, and lending as the use cases they are most interested in, followed closely by access to altcoins, crossborder settlements, and yield farming,” the report said.

Magazine: Bitcoin dominance will fall in 2025: Benjamin Cowen, X Hall of Flame

Politics

Eliminating archaic payments systems with stablecoins

Published

3 hours ago

March 18, 2025

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Eliminating archaic payments systems with stablecoins

Opinion by: Simon McLoughlin, CEO at Uphold

2021 witnessed a fintech investment boom, with startups raising approximately $229 billion globally. Higher interest rates and tighter economic circumstances have since tempered that exuberance, but funds continue to pile into the sector. Indeed, the global fintech sector is expected to see a rebound in investment activity throughout 2025.

Why are investors continuing to bet big on this sector? The answer is simple. The current international finance system is in urgent need of modernization. Built for a pre-internet age, it relies on outdated processes, chains of intermediaries and a patchwork of non-standard regulations.

An aging and expensive system

Take SWIFT as a case in point. Founded in 1973, SWIFT remains the backbone of cross-border payments. SWIFT is nothing more than a messaging system that enables banks to communicate around transactions. It was never designed to manage funds or process transactions. As a result, a “make do and mend” approach has grown around international payments, characterized by a proliferation of intermediaries and local payment rails.

This antiquated, fragmented system creates significant friction in cross-border transactions, leading to delays, high costs and limited choice for individuals and businesses outside major economic blocs. Fees for international payments currently average 1.5% for businesses and all the way up to 6.3% for remittances. Payments can take up to several days to reach recipients.

This system hinders global commerce and exacerbates financial exclusion, particularly in the global south, where volatile local currencies and limited access to traditional banking services are common.

Many of these friction points could be resolved by stablecoins, making transferring money across borders as easy as sending an email. Indeed, the blockchain-based currency has the potential to revolutionize global finance.

Democratizing access to fiat currencies

For people in countries with volatile economies or unstable governments, stablecoins offer a safe haven for savings. Stablecoins pegged 1:1 to a fiat currency such as the US dollar provide consumers in these regions with a way to escape their national financial system with a trustworthy and transparent alternative that protects them from inflation and currency devaluation. This is particularly important in the global south, where economic instability can erode the value of hard-earned income and savings.

According to UBS, consumers in developing countries are also attracted to stablecoins due to the lower risk of government interference with the currency. The wealth management firm believes stablecoins are increasingly seen as “digital dollars” and used for everything from savings to transactions to remittances in these regions.

Empowering small businesses and freelancers

Stablecoins can significantly reduce the costs and complexities associated with international payments, enabling small businesses and freelancers to participate in the global marketplace on a more level playing field. This opens up new opportunities for entrepreneurship and economic growth in developing countries.

Recent: Dubai recognizes USDC, EURC as first stablecoins under token regime

In our current payment system, physical money does not cross borders — only information does. A payroll company looking to pay a freelancer in a third country cannot do so directly and must use systems like Stripe, which uses virtual bank accounts to get around the problem.

With stablecoins, payroll companies can pay in any currency to any currency, using crypto on- and off-ramps to facilitate the payment. The business pays in dollars, for example, which is on-ramped to Tether’s USDt (USDT) and sent to the freelancer’s digital wallet, where they can either keep it or off-ramp it to their local currency. Stablecoins will prove to be, and are, a vital tool in helping businesses access global talent and fill their skills gaps.

Facilitating financial inclusion

Through offering an alternative to traditional banking systems, stablecoins also provide financial services to the unbanked and underbanked populations. This can be particularly transformative in regions with limited access to traditional financial infrastructure or in countries like Argentina, where there is low confidence in the national monetary system.

According to the Bank for International Settlements, stablecoins can enable a wide range of payments and provide a gateway to other financial services, replicating the role of transaction accounts as a stepping stone to broader financial inclusion.

Given their ability to provide access to financial services anywhere with an internet connection, stablecoins are seeing explosive growth in emerging markets. Use cases are expanding rapidly across Africa, Latin America, and parts of developing Asia, where they are being used to hedge against inflation, for remittances and cross-border payments, and as a simpler alternative to US dollar banking. This growth trajectory can be expected to continue in the years ahead.

A shot in the arm for global business

Stablecoins are rapidly rising in popularity and already total more than $233 billion in market capitalization, while transaction volumes in 2024 reached $15.6 trillion, surpassing those of Visa. In an increasingly uncertain world, they offer a stable, low-cost and rapid means of transferring money across borders, helping to increase financial inclusion and smooth access to global talent for employers. Stablecoins are a digital-first financial tool for a digital-first world and are ideally suited to replacing the current archaic international payments system.

Opinion by: Simon McLoughlin, CEO at Uphold

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Politics

Coinbase stock may rally to $310 on Trump-led crypto policies

Published

7 hours ago

March 18, 2025

admin

Coinbase stock may rally to 0 on Trump-led crypto policies

Coinbase exchange’s stock price has received an optimistic price prediction from a Bernstein analyst, citing improving crypto regulatory clarity in the world’s largest economy.

Gautam Chhugani, an analyst at global asset management firm Bernstein, initiated coverage of Nasdaq-listed Coinbase (COIN) stock with an outperform rating and a price target of over $310.

The analyst expects improving mainstream cryptocurrency adoption, driven by US President Donald Trump’s administration, which intends to make crypto policy a national priority and make the US a global hub for blockchain innovation, according to a Bernstein research note seen by Tipranks.

If Coinbase shares manage to rise to $310, it would mean an over 64% rally from the current $188 mark, Google Finance data shows.

Coinbase stock may rally to $310 on Trump-led crypto policies — *COIN/USD, all-time chart. Source: Google* *Finance*

The bullish price prediction comes over a week after Trump hosted the first White House Crypto Summit on March 7, shortly before he signed an executive order that outlined a plan to create a Bitcoin reserve using cryptocurrency forfeited in government criminal cases, Cointelegraph reported.

Coinbase stock may surge on improving crypto regulatory clarity in the US

Coinbase is set to benefit from crypto’s “ascendancy to the US financial mainstream” amid improving regulations, mainly due to the firm offering a one-stop platform for numerous crypto activities, wrote the research note, adding:

“COIN is described as a crypto exchange, but it is actually what a universal Bank would look like in the world of blockchain-based financial services.”

“COIN offers an exchange, broker/dealer, institutional prime desk, stablecoin banking, crypto payments, custodian bank, software and blockchain ecosystem services, all combined into a full stack ‘Amazon’ of crypto financial services,” added the report.

Crypto regulation is heading in a positive direction, with some analysts seeing the US Bitcoin reserve plan as the first “real step” for Bitcoin’s integration into the global financial system.

“The US has taken its first real step toward integrating Bitcoin into the fabric of global finance, acknowledging its role as a foundational asset for a more stable and sound monetary system,” Joe Burnett, head of market research at Unchained, told Cointelegraph.

While Trump has previously highlighted his intentions to bolster crypto innovation in the US, issuing regulatory frameworks takes time and setting the “right regulatory tone” will be crucial for the administration, according to Anastasija Plotnikova, co-founder and CEO of Fideum — a regulatory and blockchain infrastructure firm focused on institutions.