UK Members of the Parliament-MPs advocate for crypto like Bitcoin and Ether to be treated as gambling with claims of significant financial risks associated with them.
MPs added that “these characteristics more closely resemble gambling than a financial service.” MPs also criticized the government’s abandonment of plans for the Royal Mint to create a non-fungible token (NFT).
The Treasury Select Committee analyzed that the value of a crypto could change drastically and investors were at risk of losing their entire funds. Also, “unbacked” crypto assets, that is cryptocurrencies with no fixed value, serve no social purpose and present the potential for substantial gains or losses, the committee said. The committee however recommended a balanced approach.
While the move could subject crypto to gambling regulations, the Treasury told the media outlet BBC that they do not support using gambling regulation.
A Treasury official commented that gambling regulations have a track record of mitigating crypto. Adding that the risks associated with crypto are “typical of those that exist in traditional financial services and its financial services regulation.”
The Trade Association of Crypto, UK chapter (CryptoUK) debunked the committee’s findings, stating that MPs’ observations about cryptocurrency were “unhelpful, false, fundamentally flawed and unsubstantiated.”
Former sports minister and gambling campaigner Conservative MP Tracey Crouch responding to individual experiences with crypto and their conclusion that the market follows a gambling model stated, “At the moment, crypto feels like a Wild West town with no sheriff.”
She further said, “However, I’m sure, if properly resourced, the Gambling Commission could bring some order into this complex, risky, and often confusing area that has unwittingly sucked in consumers by marketing to them via sports such as football, giving a pretense to fans and others that they are safe and protected.”
Generally, MPs said, “While they supported innovation, the potential benefits from crypto asset technologies remained uncertain.”
The UK eyes becoming a leading global center for cryptocurrencies and blockchain technology and is formulating its inaugural regulations for these digital assets. This vision is affirmed by Chancellor Rishi Sunak in his ambition to make the UK a global hub for technology.
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