The UK Parliament’s Treasury Committee recently published a report that suggested unbacked cryptocurrencies should be regulated in the same way as gambling. This comes as a surprise, especially considering the UK government’s ambitions of making the country a global hub for the crypto industry.
According to the members of the Treasury Committee, speculation in unbacked digital assets “more closely resembles gambling than it does a financial service.” They argued that the price volatility and lack of intrinsic value would always pose significant risks to consumers, regardless of the regulatory regime.
As a result, the report recommended that cryptocurrencies should be treated alongside gambling activities. If regulations are seen as pro-crypto, consumers might get the impression that crypto is safer than it actually is or even protected when it’s not.
The report’s release follows a revelation by British media outlet Sky News, which noted that some members of the committee described cryptocurrencies as having “no intrinsic value and no useful social purpose.”
The new stance appears to contradict the UK government’s earlier plans to robustly regulate crypto asset activities on a level with traditional finance. On February 1, the government announced its intentions to regulate a broad suite of crypto asset activities, consistent with its approach to conventional finance.
This recent development raises questions about whether the UK can indeed become a global hub for crypto if such a strict regulatory environment is implemented. The industry’s proponents may have been hoping for more pro-crypto regulations in return for establishing a thriving digital asset ecosystem within the country.
In summary, the UK Treasury Committee’s call for the regulation of unbacked cryptocurrencies in the same manner as gambling activities has raised eyebrows in the crypto community. While some argue that such an approach will protect consumers from potentially risky investments, others believe that this may damage the country’s ambitions of becoming an international leader in the domain.
As the debate surrounding the best course of action continues to unfold, it is crucial for regulators, financial industry players, and crypto enthusiasts alike to engage in constructive dialogue. Ultimately, this will help to strike a balance between preserving consumer safety while enabling the growth and innovation that the digital asset industry has to offer.
Source: Cryptonews
