Nigel Farage has been trying to block a Bank of England cryptocurrency plan that could be costly for the billionaire bankrolling his party.
The Reform UK leader has said Christopher Harborne wants nothing in exchange for the millions he has donated to the party and the undeclared £5m personal gift to Farage that the Guardian revealed in April.
But Farage used a private meeting at the Bank to urge the governor to drop plans for a state-run alternative to the digital currency that has made his Thailand-based benefactor one of the richest people in the world.
Farage’s opposition to the proposal for a “Britcoin” is so strong that, after the meeting last September, he told an audience of crypto enthusiasts he would be “prepared to go to prison” to stop it, footage of the event shows.
Harborne’s £25m in donations to Farage’s Reform UK, formerly the Brexit party, account for about two-thirds of its funding. He is one of a handful of tech figures who own Tether, the company that issues the world’s most widely traded cryptocurrency.
Tether’s digital cash, known as stablecoins, is pegged in value to government-issued currencies, allowing users to exchange their money easily between the two. Registered in El Salvador with a small staff, Tether’s reported profits have surpassed those of Netflix and Coca-Cola.
If Harborne’s share of the profits is equal to his 12% stake, that would give him about £1bn a year. Those profits could fall, however, if the Bank’s governor, Andrew Bailey, proceeds with the Britcoin plan, which could cut demand for stablecoins such as Tether’s, according to a submission to the central bank by an industry body that represents the company.
Farage told October’s Zebu Live event in London he regarded the Bank’s plans for a digital pound with “total and utter horror”.
He recounted the meeting he and his fellow Reform MP, the property developer Richard Tice, held at Threadneedle Street with Bailey. “I asked him straight: ‘Are you still progressing your plans for a British central bank digital currency?’ And the answer was: ‘Yes.’”
Farage’s dislike of Bailey’s governorship has recently become the subject of deepfake memes promoting crypto scams that depict the politician beating up the central banker at a falsified TV appearance.
Like his advocacy for crypto in general, Farage frames his position on central bank digital currencies as part of a campaign for freedom from an over-powerful state. Rather than linking his opposition to the possible threat to companies such as Tether, he claims to be concerned that Britcoin would rely on a digital ID system. Some critics have made this claim, but the Bank has not said this would be the case.
“I don’t want to live in a country with a central bank digital currency,” he told the crypto event. He added: “I’m prepared to go to prison to stop us having [central bank digital currencies] administered under digital ID. That is how committed I am.”
The Guardian sent the main points of this article to Reform and Harborne. Harborne’s lawyers said they contained “a number of unsupported insinuations, hallucinations, and conspiracy theories bearing no basis in reality” but did not give detailed responses, adding: “Mr Harborne will not comment on fantasy.”
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A Reform spokesperson said: “This is utter rubbish. Nigel’s only focus is on saving the country.”
But in his opposition to Britcoin, Farage’s position appears to be closely aligned with Tether’s.
Digital Currencies Governance Group (DCGG), an industry body representing what it describes as a “full spectrum of key stakeholders in the ecosystem, including Tether”, made a submission to the Bank and the Treasury about the Britcoin plans in 2021. It claimed there was a “significant risk” that users might switch away from stablecoins such as Tether’s to the state-run digital currency, “stifling growth and innovation”.
The DCGG submission said that although “some argue that central bank digital currencies will restrict illegal activity”, the authorities should instead develop “a regulated market for private stablecoins”.
Tether stablecoins are popular as an alternative to currencies plagued by inflation, and to pricey money-transfer services. Billions in Tether stablecoins – which users can buy and sell without revealing their identity – are known to have been used by Russian people breaking sanctions, Asian perpetrators of “pig-butchering” romance scams, North Korean hackers, British drug gangs and transnational organised criminals. The company’s representatives say it collaborates with law-enforcement agencies in dozens of countries.
Harborne’s lawyers have stressed that he is a minority shareholder in Tether, not an executive. But he does appear to have sought to shape policymakers’ approach to crypto.
EU lobbying records say Harborne was registered as a DCGG lobbyist in 2020-21, seeking to influence Brussels’ crypto policy. He met the staff of at least one MEP, from the liberal Czech Pirate party.
Harborne’s lawyers point out there is no evidence his activities in connection with DCGG were undertaken for or on behalf of Tether.
Harborne also appears to have invited DCGG’s boss to a Conservative fundraising dinner in 2022, a period when he had temporarily switched his donations from Farage to the Tories.
Francesca Salierno, formerly an aide to a Ukip MEP, joined Harborne at the Victoria & Albert Museum for the exclusive event in June 2022. That was shortly after Boris Johnson’s government had announced its crypto policy, which included proposals for regulating stablecoins.
Founded by a reclusive Italian former plastic surgeon, Tether does not publish full accounts or undergo audits. It has found favour in the US under Donald Trump, who appointed its banker, Howard Lutnick, as his commerce secretary. A reported investigation into dirty money flowing through its digital currency appears to have ceased.
In the UK, the company has a champion in Farage. Talking up Tether on LBC radio in September, the month after Harborne gave Reform a record £9m, Farage said: “Stablecoins, crypto, this world is enormous, and I’ve been urging for years that London should embrace it. We should become a global trading centre for this stuff.”
As well as using his meeting with Bailey to object to the Bank’s digital currency plans, Farage has said he pushed the governor to abandon a proposed cap on stablecoin holdings by individuals in the UK.
At the Zebu Live event, Farage said he told Bailey: “Listen mate, you’re being a dinosaur.” Farage has claimed Bailey changed his plans as a result. Bank officials have said that following a consultation they are considering this and other options to address risks posed by stablecoins.
The Bank has refused a freedom of information request for details of Farage’s meeting with Bailey, saying that “disclosure would be likely to inhibit the free and frank provision of advice”.
Tim Picton, of the campaign group Spotlight on Corruption, said: “The Bank of England should disclose the full minutes of its meeting with Farage and Richard Tice last year. With the government at a critical stage of developing its landmark regulatory framework for crypto assets, it is vital that we have more transparency around the key players and vested interests trying to shape it.”
A Bank of England spokesperson said Farage’s meeting with Bailey was “part of the Bank’s engagement with political representatives” and acknowledged his “differing view” from the governor. The Bank was drawing up cryptocurrency policy with “feedback … from industry, academia, and the public”.
Additional reporting by Henry Dyer
