The UK government has dismissed a proposed bill seeking to classify and regulate cryptocurrency trading as a form of gambling. Instead, the government has confirmed its intention to regulate the cryptocurrency sector similarly to other financial services.
The proposal, put forth by the Treasury Committee of Parliament, aimed to regulate retail trading and investment activities in unsupported cryptocurrencies as gambling, reflecting concerns about the high volatility of cryptocurrencies and their perceived resemblance to risky gambling rather than conventional investments.
The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue and Customs and associated public bodies.
However, the Treasury Department expressed “strong disapproval” of the recommendation. The government agrees that cryptoassets pose risks, but it also wants to treat them as a legitimate part of the financial services landscape.
“This firmly establishes the government’s position that cryptocurrencies, despite their inherent risks and volatility, are valid financial assets,” stated Andrew Griffith, the UK Minister for Financial Services. He emphasized that the government will “continue working on regulatory measures to protect investors while fostering growth and innovation within the cryptocurrency sector.”
The UK government’s stance underscores the ongoing debate surrounding cryptocurrency regulation, with different countries adopting diverse approaches. While some nations have opted for strict regulations, the UK is affirming its recognition of cryptocurrencies as an extension of the traditional financial system.
It offers the following key recommendations:
- The government should establish a dedicated financial promotions regulatory regime for cryptoassets.
- The government should introduce a robust issuance disclosure regime for cryptoassets.
- The government should work with international partners to develop a coordinated approach to regulating cryptoassets.