Kemi Badenoch has not ruled out forming coalitions at a local level with Reform after the council elections on Thursday.
Speaking to Sunday Morning with Trevor Phillips, the Conservative leader did however categorically rule out a pact with Nigel Farage’s party on a national level.
“I am not going into any coalition with Nigel Farage… read my lips,” she said.
However, she did not deny that deals could be struck with Reform at a local level, arguing some councils might be under no overall control and in that case, “you have to do what is right for your local area”.
“You look at the moment, we are in coalition with Liberal Democrats, with independents,” she said. “We’ve been in coalition with Labour before at local government level.
“They [councillors] have to look at who the people are that they’re going into coalition with and see how they can deliver for local people.”
More on Conservatives
Related Topics:
She added: “What I don’t want to hear is talks of stitch-ups or people planning things before the results are out. They have to do what is right for their communities.”
In response, Nigel Farage said: “The Tories broke Britain nationally for 14 years, and their councils continue to break local communities with the highest taxes ever and worst services.
“Reform have no intention in forming coalitions with the Tories at any level.”
A total of 23 councils are up for grabs when voters go to the polls on Thursday 1 May – mostly in places that were once deemed Tory shires, until last year’s general election.
It includes 14 county councils, all but two of which have been Conservative-controlled, as well as eight unitary authorities, all but one of which are Tory.
In addition, there is one Labour-controlled borough being contested.
The last time this set of councils were up for election was in 2021, when the Conservative Party was led by Boris Johnson who was riding high from the COVID vaccine bounce.
Despite not ruling out agreements between the Tories and Reform once the local elections have finished, Ms Badenoch has been at pains to stress she is against any kind of deal with Mr Farage at a national level.
On Friday she criticised talk of “stitch-ups” ahead of next week’s local elections and said she was instead focused on ensuring that voters have a “credible Conservative offer”.
Speculation that the Tories and Reform could join forces heightened after two senior Tories appeared to advocate for some sort of agreement between the two rival parties.
Robert Jenrick, the shadow justice secretary, was captured in a video recording leaked to Sky News vowing to “bring this coalition together” to ensure that Conservatives and Reform UK are no longer competing for votes by the time of the next general election.
Please use Chrome browser for a more accessible video player
1:56
What leaked audio of Jenrick tells us
According to the excusive audio Mr Jenrick – who lost the Tory leadership campaign to Ms Badenoch – said he would try “one way or another” to make sure the two right-wing parties do not end up handing a second term to Sir Keir Starmer.
Mr Jenrick has denied his words amounted to calling for a pact with Reform.
Meanwhile, in an interview with Politico, Tees Valley Mayor Ben Houchen also suggested the two parties should join forces in some way.
“I don’t know what it looks like. I don’t know whether it’s a pact. I don’t know whether it’s a merger… [or] a pact of trust and confidence or whatever,” he said.
“But if we want to make sure that there is a sensible centre-right party leading this country, then there is going to have to be a coming together of Reform and the Conservative Party in some way.”
All of the other national parties have launched their campaigns for the local elections ahead of the poll next week.
Labour Cabinet Office minister Pat McFadden told Trevor Phillips that he was “not predicting huge Labour gains on Thursday”.
He also ruled out Labour striking deals with any other party.
“The deals on offer after Thursday won’t be between Labour and the Tories and Labour and Reform,” he said.
“But what there’s been a lot of debate about is what’s going to happen between the Tories and Reform, because I’m not even sure if they’re two different parties or one party at the moment.”
The prime minister has acknowledged Britons’ cost-of-living struggles in his Christmas message – and vowed that helping with the issue is his “priority”.
Sir Keir Starmer also urged members of the public to “each do our bit” and “reach out” to friends, relatives and neighbours during the festive period.
In a message recorded inside 10 Downing Street, Sir Keir said: “I know many across Britain are still struggling with the cost of living. Helping with that is my priority.
“But at this time of the year, which celebrates love and abundance, loss or hardship can feel even more acute.
“So call around to a neighbour. Check in on a friend or a relative who you haven’t heard from for a while. Reach out. It can make a huge difference.
“That is what Christmas is about.”
Image: Sir Keir Starmer delivers his Christmas message from inside Downing Street. Pic: Downing Street
The prime minister thanked NHS workers along with members of the military and the emergency services who will be on duty on Christmas Day.
“Just as so many put their feet up, some truly special people will be pulling on their uniforms and heading out to work,” he said.
“Our NHS staff emergency services and the brave men and women of our armed forces, all playing their part, doing their bit to care for the nation and to keep us safe.
“Many volunteers will be out there as well. Serving food. Reaching out to help those lonely or in need.
“So on behalf of the whole country, I want to say a big thank you.
“As a nation, we should raise a glass to you this Christmas. But more than that, we should each do our bit as well.”
Sir Keir Starmer turning on the Christmas tree lights in Downing Street.
Conservative leader Kemi Badenoch used her Christmas message to talk about “Christian values” and thanked “everyone who has supported me during my first year as leader of the opposition”.
“It’s been the biggest challenge of my life,” she said. “But it’s also been a wonderful year. I can’t wait to get back to work next year to create a better United Kingdom.”
Liberal Democrat leader Sir Ed Davey spoke about the Christmas tree in London’s Trafalgar Square – an annual gift from Norway to thank the UK for its support during the Second World War – in his message.
While saying the tree may “look a little underwhelming” on first glance, the Liberal Democrat leader said it was a reminder of “friendship and loyalty”.
He added: “It makes me think about people standing together in tough times – whether against the Nazis in the 1940s, or right now in Ukraine.
“And yeah, it might not be perfect, but this tree in Trafalgar Square makes me think about families and friends looking out for one another right here at home.
“I can’t think of a better symbol of the Christmas spirit of generosity, love and hope. Of light in the darkness.”
Many crypto industry leaders and users anticipate significant changes in the US regulatory environment over the next 12 months, as various policy changes and legislation begin to take effect.
Although the inauguration of US President Donald Trump in January 2025 did not mean an immediate end to all digital asset regulation, many of the administration’s policies, from dismissing enforcement cases of crypto companies by the Securities and Exchange Commission to signing a stablecoin bill into law, signal apparent differences to previous US presidents and their chosen regulators.
“I expect an increasing number of jurisdictions to establish clear and transparent regulatory frameworks for the crypto industry, which should facilitate broader participation,” Ruslan Lienkha, YouHodler’s chief of markets, said in a statement shared with Cointelegraph. “Consequently, we are likely to see a significant rise in the involvement of banks and other financial institutions in the market in 2026.”
Digital asset market structure
As of late December, the US Senate has yet to vote on legislation to establish clear regulatory guidelines for digital assets.
The initial bill, known as the Digital Asset Market Clarity Act (CLARITY), was passed by the House of Representatives in July. However, lawmakers in the Senate said their versions of the legislation would “build on” the existing bill rather than passing it through the chamber without any changes.
As a result, leadership on the Senate Banking Committee released a Republican-led discussion draft of the bill in July, and the Senate Agriculture Committee announced a bipartisan draft in November. Both bills will need to go through the respective committees before the full chamber can vote on either, or some combination thereof.
The drafts suggested that Congress could grant the Commodity Futures Trading Commission more authority to regulate digital assets. The Securities and Exchange Commission has taken on a more prominent role in overseeing cryptocurrencies, with some notable exceptions.
According to digital asset management company Grayscale, the bill will “facilitate deeper integration between public blockchains and traditional finance, facilitate regulated trading of digital asset securities, and potentially allow for onchain issuance by both startups and mature firms.”
Both agencies have filed enforcement actions and issued rulemaking affecting the industry, but the SEC oversees exchange-traded funds tied to digital assets. The CFTC regulates Bitcoin (BTC) and Ether (ETH) as commodities in digital form.
Implementation of the GENIUS stablecoin act
One of the other pieces of legislation to emerge from a Republican-led US Congress in 2025 was the GENIUS Act, which aimed to establish a regulatory framework for payment stablecoins. Although Trump signed the bill into law in July 2025, it will take effect either 18 months after enactment or 120 days after regulators approve regulations related to implementation, putting the timeline in 2026 or later.
As part of the implementation process, the US Treasury Department opened two rounds of comments for proposed rules related to the GENIUS Act in August and September. The notice of proposed rulemaking could be made public in the first half of 2026, according to some experts.
“As regulatory clarity solidifies, particularly through laws like the GENIUS Act that establish federal stablecoin oversight, banks are increasingly exploring onchain tooling that could transform payments, settlements and liquidity provisioning,” Gracy Chen, CEO of Bitget, said in a statement shared with Cointelegraph. “Should major US banks begin issuing compliant stablecoins or tokenized deposits, we could see significant expansion of global liquidity, faster transaction settlement times, and richer DeFi composability built on regulated infrastructure.”
In addition to the Treasury, other US banking regulators have put forward proposals for stablecoin rules. On Dec. 16, the Federal Deposit Insurance Corporation (FDIC) proposed that subsidiaries of supervised banks could issue payment stablecoins under the criteria passed under GENIUS.
CFTC leadership yet to be named by Trump
In 2025, four out of the five commissioners serving as the CFTC’s leadership stepped down, leaving only Republican Caroline Pham to serve as the acting chair and the agency’s sole commissioner as of December.
Although Trump initially nominated former CFTC Commissioner Brian Quintenz to replace Pham as a Senate-confirmed chair of the agency, the White House pulled him from consideration in September, reportedly in response to pushback from Gemini co-founders Tyler and Cameron Winklevoss, who are both Trump donors and prominent figures in the crypto industry.
As of December, Trump has not publicly announced any potential replacements for the four remaining CFTC commissioner seats, despite many of them being vacant for months.
State-level crypto reserves
In June, Texas Governor Gregg Abbot signed a bill into law creating a state-managed fund that could hold Bitcoin (BTC), making the state the first to establish a crypto reserve. State officials announced in November that the fund held $5 million worth of shares in BlackRock’s spot Bitcoin ETF with plans to invest an additional $5 million directly in BTC, a move that could come in 2026.
Although many lawmakers in other US states proposed similar crypto reserve bills in 2024 and 2025, only legislation in Arizona and New Hampshire was signed into law. Both states could announce BTC or other crypto purchases in the coming year as part of their governments’ treasury strategy.
The International Monetary Fund’s mission chief for El Salvador issued a statement confirming that government authorities were proceeding with negotiations for the sale of the country’s Chivo Bitcoin wallet.
In a Monday statement, the IMF said El Salvador’s government was continuing to discuss its Bitcoin (BTC) project with the fund’s officials, and “negotiations for the sale of the government e-wallet Chivo are well advanced.” The announcement signaled that the government may be preparing to sell some or all of its crypto holdings in the Chivo wallet.
The statement followed a May deal with El Salvador in which the IMF would pay $120 million as part of a 2024 loan agreement for $1.4 billion. As part of the deal, the government would stop acquiring Bitcoin.
It’s unclear whether El Salvador is abiding by the terms of the deal. Though the IMF reported in July that the country’s government had not purchased any BTC since December 2024, El Salvador’s Bitcoin Office continues to announce crypto buys, including 1,090 Bitcoin worth about $100 million in November.
According to the terms of the IMF-El Salvador deal made public, the government would make public sector engagement of BTC-related economic activity “confined,” the private sector’s acceptance of Bitcoin would be voluntary, and it would wind down involvement in the Chivo wallet. Cointelegraph reached out to the IMF for comment but had not received a response at the time of publication.
El Salvador recognized Bitcoin as legal tender in 2021 and began acquiring the cryptocurrency as part of a strategy largely pushed by President Nayib Bukele. According to data provided by the country’s Bitcoin Office, the government held 7,509 Bitcoin as of Monday, worth about $659 million at the time of publication.
‘It’s not stopping,’ says Bukele on Bitcoin buys
Despite the reported deal between the IMF and El Salvador, Bukele said in March that the government would continue its Bitcoin investment strategy, purchasing at least one BTC daily. It’s unclear how the president’s statement could affect the IMF agreement.