Ex-UK Chancellor backs bitcoin as alternative to failing systems

Kwasi Kwarteng, the UK’s former Chancellor of the Exchequer who served just weeks in September 2022, is re-emerging with a renewed focus on bitcoin, monetary history, and long-term economic thinking.

Revisiting the 2022 mini-budget

In an interview with CoinDesk, Kwarteng reflected on the “infamous mini-budget,” describing it as rushed in the immediate aftermath of taking office on Sept. 6, 2022. He said the policy was introduced “two weeks after we took office,” and that the timeline was further compressed by the death of Queen Elizabeth II two days later, leaving limited opportunity for coordination or scrutiny.

Kwarteng said the fallout was severe, noting that gilt yields rose sharply and that the episode helped expose the UK’s Liability-Driven Investment (LDI) pension crisis.

Fiscal “doom loop” and criticism of short-termism

While defending the intent behind the policy, Kwarteng argued the UK is now trapped in a fiscal “doom loop,” where “you’re spending more money than you can raise in taxation.” He added that rising taxes ultimately “kill incentives in the economy.”

He also criticized what he described as short-termism in politics and markets, saying: “Everything’s quarterly driven, people are either euphoric or freaking out. And actually, you’ve got to take a longer view.”

Bitcoin, digital assets, and a longer-term policy stance

Kwarteng said his longer-term perspective now informs his thinking on bitcoin and money more broadly. He stated that while the Treasury and the Bank of England were aware of bitcoin and digital assets, their role was “still incredibly small,” which he linked to what he sees as UK reluctance to embrace innovation.

He also pointed to a cultural gap with Europe, saying Paris is becoming “quite forward leaning on digital assets.”

In addition, Kwarteng pushed back on criticism from Boris Johnson, after the former prime minister called bitcoin a “Ponzi.” Kwarteng argued for a more open-minded view of emerging forms of money.

Stack BTC venture and political attention

Kwarteng is now involved with UK bitcoin treasury firm Stack BTC (STAK) as executive chairman. The company holds 31 BTC on its balance sheet.

The firm has attracted increased political attention, including Reform UK leader Nigel Farage taking a 6% stake in the company.

Shift toward resilience and long-term thinking

For Kwarteng, the move reflects a shift away from reactive policymaking toward what he describes as a more resilient monetary future grounded in long-term thinking.