According to a recent report by a panel of UK lawmakers, transactions involving bitcoin should be regulated as gambling activities. The arguments: inherent volatility and perceived lack of intrinsic value. These characteristics would make the cryptocurrencies particularly risky for consumers.
The UK is currently working on a regulatory framework for cryptocurrencies, a mix of existing financial laws and new, branch-specific rules for transactions. With many of these rules, bitcoin belongs with all other tokens in the industry.
However, in a House of Commons committee report on 17 May, the UK Treasury Committee pushed for regulation of retail crypto trading as gambling, in line with the principle of “equal risk, equal regulatory outcome”.
The commission chairman, Harriett Baldwin, pointed to Bitcoin and Ether as the two cryptocurrencies that together represent two-thirds of the total market capitalization of cryptocurrencies. According to her, both are “unsupported”, which means that they have no intrinsic value. She stressed that the regulation of retail trade in such cryptocurrencies as financial services could lead consumers to mistakenly believe that this activity is safer than it really is.
In the United Kingdom, all gambling, both online and land-based, is regulated by the Gambling Commission under the Gambling Act 2005. The aim of this is to prevent problematic gambling and to apply anti-money laundering measures.
The legislators referred in their argumentation to statements by Dr. Larisa Yarovaya, associate professor at the University of Southampton. She argued that crypto exchanges and other companies in the crypto sector should be regulated with the same rigor, as speculation with crypto can be addictive.
Despite the concerns, the committee also recognized the potential of some cases, but the focus is mainly on “technology”. It stressed that there needs to be an effective regulatory framework to support these developments in the UK while mitigating some of the risks associated with cryptocurrencies.
The committee, consisting of eleven members of parliament from both the Labour and conservative parties and the Scottish National Party, launched an investigation into the role of cryptocurrencies in the UK in July 2022. Research by the UK’s Internal Revenue Service (HMRC) found that 10% of Britons are or have been in possession of cryptocurrencies, while more than 55% have never sold any crypto.
While the UK Treasury has abandoned plans for a Royal Mint NFT, the committee welcomes the government’s efforts to publish regulatory proposals for cryptocurrencies used in financial services. “We welcome the publication of the government’s proposals on how they plan to regulate cryptocurrencies used in financial services,” the committee wrote.
Baldwin, who once served as economic secretary to the Treasury, is just one of the members of the committee, which is made up of members of both the Labour and conservative parties, as well as the Scottish National Party.
According to a 2022 survey by Chainalysis, the UK was ranked 17th in the global crypto adoption index. Also, bhet can play a special role due to Brexit. The EU is working on rules, maybe the British can solve it in another way.
