Rishi Sunak’s defence pledge sets trap for Sir Keir Starmer

Published

12 months ago

April 24, 2024

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On the plane from Warsaw to Berlin, Rishi Sunak was buoyant as he briefly chatted to the travelling pack.

Having delivered his hat-trick of welfare reforms, the Rwanda bill and now the big lift in defence spending, he was a prime minister who clearly feels on the front foot after a torrid few months.

He looked like a man enjoying the job.

Politics live: Sunak warns Europe is at a ‘turning point’

Allies said Mr Sunak has spoken a lot about the spending decision with his current Foreign Secretary Lord David Cameron, who has “form” in prioritising these decisions, having committed to defence funding back in 2010 when he was prime minister in the face of competing spending demands.

“The PM’s thought about this a lot, which is why it’s so detailed today,” said one government source.

The big decision he announced in this election year to increase defence spending to 2.5% by 2030 was a choice.

He could have committed funding to schools, the NHS or local government. But, for this prime minister, it was the right choice.

It might not be the most salient issue for voters at home, but in his speech today, he left his audience in little doubt about the risks we are facing with the rise of authoritarian regimes, such as China, Russia and Iran, working together to undermine our democracies and way of life.

But equally, Mr Sunak made this commitment knowing all too well that it may not be him that has to deliver it.

And while the sum is really big – £75bn of spending over the next six years – for this year the only commitment will be £500m for Ukraine, with the remainder of the funding coming in the next parliament.

On the assumed baseline, the government had already allocated the additional funding for 2.3% defence spending annually in the next parliament.

Increasing that to 2.5% by 2028-29 will, in cash terms, require £4.5bn of funding, which the government says will be paid for through £1.6bn from the annual research and development budget and £2.9bn from 70,000 cuts to civil servant jobs, taking the workforce back to pre-pandemic levels.

It is a clear political trap for Sir Keir Starmer, who spent much of his early years as Labour leader trying to undo the damage done by his predecessor, Jeremy Corbyn – who did not support NATO.

Starmer trap

Sir Keir has sought to re-establish Labour’s security credentials in recent years, most notably in his stance on the Israel-Hamas conflict, in which he has made sure he sticks to the US position and stands with the government on matters of national security.

So this is a big test.

Sir Keir said recently that he wanted to commit to the 2.5% of “when resources allow”, giving a future Labour government some wriggle room as it contemplates how to allocate scarce public resource.

Because, as the polls stand, Mr Sunak won’t be the prime minister having to deliver on defence-spending pledges, and already Conservative politicians are challenging Labour to commit to their plans, knowing all too well that it reduces the party’s manoeuvrability in government should it win the general election.

Hard call

And this is a hard call for the Labour leader, who has been desperate to present himself as a politician who also puts the security of the nation above all else.

In Poland, Mr Sunak evoked Winston Churchill, saying: “We did not choose this moment, but it is for us to meet it.”

He also said that to lead was to make choices, and his choice was to protect his citizens above all else.

How can Starmer refuse to meet the commitment?

Politics

Panama’s capital to accept crypto for taxes, municipal fees

Published

2 hours ago

April 16, 2025

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<div>Panama's capital to accept crypto for taxes, municipal fees</div>

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.

Taxes, Panama, Bitcoin Adoption — *Source:* *Mayer Mizrachi*

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.

Magazine: Crypto City: The ultimate guide to Miami

Politics

Fed’s Powell reasserts support for stablecoin legislation

Published

5 hours ago

April 16, 2025

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<div>Fed's Powell reasserts support for stablecoin legislation</div>

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.

Fed's Powell reasserts support for stablecoin legislation

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.

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.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Politics

Court grants 60-day pause of SEC, Ripple appeals case

Published

6 hours ago

April 16, 2025

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Court grants 60-day pause of SEC, Ripple appeals case

An appellate court has granted a joint request from Ripple Labs and the Securities and Exchange Commission (SEC) to pause an appeal in a 2020 SEC case against Ripple amid settlement negotiations.

In an April 16 filing in the US Court of Appeals for the Second Circuit, the court approved a joint SEC-Ripple motion to hold the appeal in abeyance — temporarily pausing the case — for 60 days. As part of the order, the SEC is expected to file a status report by June 15.

Law, Ripple, SEC, Court — *April 16 order approving a motion to hold an appeal in abeyance. Source: PACER*

The SEC’s case against Ripple and its executives, filed in December 2020, was expected to begin winding down after Ripple CEO Brad Garlinghouse announced on March 19 that the commission would be dropping its appeal against the blockchain firm. A federal court found Ripple liable for $125 million in an August ruling, resulting in both the SEC and blockchain firm filing an appeal and cross-appeal, respectively.

However, once US President Donald Trump took office and leadership of the SEC moved from former chair Gary Gensler to acting chair Mark Uyeda, the commission began dropping multiple enforcement cases against crypto firms in a seeming political shift. Ripple pledged $5 million in XRP to Trump’s inauguration fund, and Garlinghouse and chief legal officer Stuart Alderoty attended events supporting the US president.

Despite support for the end of the case coming from both Ripple and the SEC, the August 2024 judgment and appellate cases leave some legal entanglements. Alderoty said in March that Ripple would drop its cross-appeal with the SEC and receive a roughly $75 million refund from the lower court judgment. It’s unclear what else may result from negotiations over a settlement in appellate court.

New leadership at SEC incoming

Acting chair Uyeda is expected to step down following the US Senate confirming Paul Atkins as SEC chair on April 9.

During his confirmation hearings, lawmakers questioned Atkins about his ties to crypto, which could create conflicts of interest in his role regulating the industry. In financial disclosures, Atkins stated he had millions of dollars in assets through stakes in crypto firms, including Securitize, Pontoro and Patomak.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered