British Parliament called for equating cryptocurrencies with gambling
UK parliament called to equate trading and investing in cryptocurrencies to gambling
Regulating both ordinary financial services trading and investing in crypto assets would give depositors a false sense of security, officials say
The U.K. House of Commons Treasury Committee argues that investing in "unsecured" cryptocurrencies like Bitcoin and Ethereum should be equated with gambling. Regulating the industry without such an approach could create an illusion of safety for investors in crypto-assets, according to a committee report published May 17.
The Treasury Committee of the House of Commons (the UK's lower house of parliament) is responsible for examining the spending, administration, and policies of the Treasury with all of its agencies and related bodies, including the Revenue Service, Customs, Bank of England, Financial Services Authority, Royal Mint, and other government bodies.
Late last October, members of the U.K.'s lower house of parliament voted to recognize cryptocurrencies as regulated financial instruments. In their view, cryptocurrencies should be considered another type of financial asset, rather than a separate category.
The committee criticized this position in its report, saying that the government should take a different approach to regulating cryptocurrencies to better protect consumers from losses due to the increased volatility of "unsecured assets," such as Bitcoin and Ethereum.
The characteristics of cryptocurrencies are more akin to gambling than financial services, which is also supported by data on consumer behavior, according to the report's authors. They argue that regulating trading and investing in crypto-assets as regular financial services would lead depositors to believe that the investments are safe, when in fact they are not.
In addition, the committee recommends that the government take a balanced approach to invest in the development of crypto technology and avoid spending public funds to support crypto assets without a clear and beneficial application scenario.
Last year, the kingdom's government set out to improve London's global competitiveness in the financial sector, including the cryptocurrency industry. The U.K. is in the process of developing regulations for crypto-assets. According to the Ministry of Finance, they are aimed at realizing the government's "ambition" to make the country a leader in the cryptocurrency industry.
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