What is the new Rwanda plan and why is it controversial?
Rishi Sunak has introduced emergency legislation in a bid to salvage his embattled Rwanda asylum plan and deliver on his pledge to “stop the boats”.
The goal is to ensure those not entering the UK by legal means face being sent on a one-way trip to the east African country.
But last month, the Supreme Court ruled the policy unlawful and could not go ahead as it was, concluding there was a real risk genuine refugees sent to Rwanda could be returned to their home country, where they would face “ill-treatment”.
In a bid to address the concerns, Home Secretary James Cleverly travelled to the country’s capital Kigali to sign a fresh deportation treaty before setting out the details of a proposed bill, which faces its first parliamentary test on Tuesday.
What is the latest Rwanda plan?
It is made up of two parts, aimed at making the deal legally watertight and so avoiding further setbacks, which have so far blocked all deportation flights amid soaring costs of the stalled policy.
The treaty, which needs to be ratified by the UK and Rwandan parliaments to make it internationally binding, centres on providing assurances to the Supreme Court that asylum seekers sent to Rwanda will not be removed and sent to another country where they face persecution.
As part of this, a new appeals process will be established to deal with exceptional cases, such as if someone living in the country under the scheme commits a crime.
British and Commonwealth judges, as well as Rwandan judges, will preside over the appeal hearings and decide whether the individual remains in Rwanda or is sent back to the UK.
Meanwhile, the legislation is designed to enable parliament to confirm Rwanda is a “safe country”.
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Rwanda scheme ‘will do the job’
In a bid to reduce the scope for domestic court hold-ups, the legislation gives ministers the powers to disregard sections of the Human Rights Act, but does not go as far as allowing them to dismiss the European Convention on Human Rights (ECHR).
The UK was among the first to ratify the international treaty which commits its 46 signatories to abide by rules on rights to life, liberty and expression, and protection from torture, degrading treatment and slavery.
It is not linked to the European Union, so Brexit did not affect the UK’s obligations.
Why does this matter?
Because Tory hardliners argue without making the Safety of Rwanda (Asylum and Immigration) Bill more robust and allowing ministers to ignore asylum rulings by both domestic judges and the European Court of Human Rights, which makes binding judgments on the convention, the policy is destined to fail.
It led to the resignation of immigration minister Robert Jenrick, who argued the legislation was “a triumph of hope over experience”.
At the same time, centrist Conservative MPs are insisting the government respects the rule of law and the UK’s international obligations.
The public divisions causes a further headache for Mr Sunak as he seeks to take the legislation through parliament and reassert his authority over fractious backbenchers.
Read more:
Whatever happens in Rwanda vote, PM is in deep trouble
What is the European Court of Human Rights?
As well as differing positions on the ECHR, the Conservatives’ poor showing in the polls has heightened the tensions within the party.
A number of Tory MPs believe reducing immigration, and particularly ending the scenes of asylum seekers arriving on Kent’s beaches, will be key to narrowing Labour’s lead and want to see the government do everything possible to achieve that.
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‘My patience has worn thin, right?’
Although the government argues the proposed bill goes as far as it can as the Rwandan government will pull out of a deal that involves leaving the ECHR altogether, ministers have hinted at compromises with rebels.
Is party infighting the only problem facing the government?
No. As well as having to navigate the bill through the Commons, it also has to clear the House of Lords, where the Tory administration does not have a majority.
Any move to relax human rights safeguards are likely to encounter stiff opposition, not least among the many leading lawyers who sit on the red benches.
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The inability of the home secretary to guarantee the proposed law is compatible with the ECHR will only fuel concerns.
As the Rwanda plan was not a manifesto commitment, critics in the unelected chamber will also argue the usual convention of not delaying the delivery of an election pledge does not apply.
With an upcoming election, the timing also means the government cannot use powers under the Parliament Act to force through the legislation.
A US federal judge has agreed to pause a lawsuit filed by 18 state attorneys general and the crypto lobby group DeFi Education Fund against the Securities and Exchange Commission after all parties said new SEC leadership could make the action moot.
Kentucky District Court Judge Gregory Van Tatenhove ordered a 60-day stay on the case on April 16, noting a mid-March filing from the SEC that “this case could potentially be resolved” due to a leadership transition at the regulator.
He added that the parties must file a joint status report within 30 days.
Paul Atkins, a Wall Street adviser who has held board positions with crypto advocacy groups, was sworn in as the new SEC chair earlier this month, replacing acting chair Mark Uyeda and taking over from Gary Gensler.
The 18 attorneys general, all hailing from Republican states, filed the lawsuit with the DeFi Education Fund against the securities regulator in November, alleging that the SEC exceeded its authority when targeting crypto exchanges with lawsuits, accusing the regulator and then-chair Gensler of “gross government overreach.”
The plaintiffs included attorneys general from Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, Indiana, Oklahoma and Florida, among others.
“Without Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority away from the States through an ongoing series of enforcement actions,” the lawsuit stated.
DeFi groups drop case against IRS over killed broker rule
Meanwhile, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council dropped their lawsuit against the Internal Revenue Service on April 16.
“The parties hereby stipulate to voluntary dismissal of this action without prejudice because the case has become moot,” stated the filing.
The lawsuit, filed in December, argued that the so-called IRS DeFi broker rule went beyond the agency’s authority and was unconstitutional.
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On April 11, President Donald Trump signed a bill to revoke the rule that would have required DeFi protocols to report transactions to the IRS.
It comes as the SEC has paused or dropped several high-profile lawsuits against crypto companies this year under its new leadership.
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Panama’s capital city will accept cryptocurrency payments for taxes and municipal fees, including bus tickets and permits, Panama City mayor Mayer Mizrachi announced on April 15, joining a growing list of jurisdictions globally that have voted to accept such payments.
Panama City will begin accepting Bitcoin (BTC), Ether (ETH), Circle’s USDC (USDC), and Tether’s USDt (USDT) stablecoin for payment once the crypto-to-fiat payment rails are established, Mizrachi posted on the X platform.
Mizrachi said previous administrations attempted to push through similar legislation but failed to overcome stipulations requiring the local government to accept funds denominated in US dollars.
In a translated statement, the Panama City mayor said that the local government partnered with a bank that will immediately convert any digital assets received into US dollars, allowing the municipality to accept crypto without introducing new legislation.
Panama City joins a growing list of global jurisdictions on the municipal and state level accepting cryptocurrency payments for taxes, exploring Bitcoin strategic reserves to protect public treasuries from inflation and passing pro-crypto policies to attract investment.
Related: New York bill proposes legalizing Bitcoin, crypto for state payments
Municipalities and states embrace digital assets
Several municipalities and territories around the globe already accept crypto for tax payments or are exploring various implementations of blockchain technology for government spending.
The US state of Colorado started accepting crypto payments for taxes in September 2022. Much like Panama City said it will do, Colorado immediately converts the crypto to fiat.
In December 2023, the city of Lugano, Switzerland, announced taxes and city fees could be paid in Bitcoin, which was one of the developments that earned it the reputation of being a globally recognized Bitcoin city.
The city council of Vancouver, Canada, passed a motion to become “Bitcoin-friendly city” in December 2024. As part of that motion, the Vancouver local government will explore integrating BTC into the financial system, including tax payments.
North Carolina lawmaker Neal Jackson introduced legislation titled “The North Carolina Digital Asset Freedom Act” on April 10. If passed, the bill will recognize cryptocurrencies as an official form of payment that can be used to pay taxes.
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As digital assets gain mainstream adoption, establishing a legal framework for stablecoins is a “good idea,” said US Federal Reserve Chair Jerome Powell.
In an April 16 panel at the Economic Club of Chicago, Powell commented on the evolution of the cryptocurrency industry, which has delivered a consumer use case that “could have wide appeal” following a difficult “wave of failures and frauds,” he said.
Powell delivers remarks at the Economic Club of Chicago. Source: Bloomberg Television
During crypto’s difficult years, which culminated in 2022 and 2023 with several high-profile business failures, the Fed “worked with Congress to try to get a […] legal framework for stablecoins, which would have been a nice place to start,” said Powell. “We were not successful.”
“I think that the climate is changing and you’re moving into more mainstreaming of that whole sector, so Congress is again looking […] at a legal framework for stablecoins,” he said.
“Depending on what’s in it, that’s a good idea. We need that. There isn’t one now,” said Powell.
This isn’t the first time Powell acknowledged the need for stablecoin legislation. In June 2023, the Fed boss told the House Financial Services Committee that stablecoins were “a form of money” that requires “robust” federal oversight.
Related: Stablecoins are the best way to ensure US dollar dominance — Web3 CEO
Support for stablecoin legislation is growing
The election of US President Donald Trump has ushered in a new era of pro-crypto appointments and policy shifts that could make America a digital asset superpower.
Washington’s formal embrace of cryptocurrency began earlier this year when Trump established the President’s Council of Advisers on Digital Assets, with Bo Hines as the executive director.
Hines told a digital asset summit in New York last month that a comprehensive stablecoin bill was a top priority for the current administration. After the Senate Banking Committee passed the GENIUS Act, a final stablecoin bill could arrive at the president’s desk “in the next two months,” said Hines.
Bo Hines (right) speaks of “imminent” stablecoin legislation at the Digital Asset Summit on March 18. Source: Cointelegraph
Stablecoins pegged to the US dollar are by far the most popular tokens used for remittances and cryptocurrency trading.
The combined value of all stablecoins is currently $227 billion, according to RWA.xyz. The dollar-pegged USDC (USDC) and USDt (USDT) account for more than 88% of the total market.
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