The UK Parliament’s Treasury Committee says cryptocurrencies such as Bitcoin (BTC) pose similar risks to consumers as gambling and should be regulated as such.
In a House of Commons Committee report, the UK Parliament says that given the volatile nature of cryptocurrencies, trading of the new asset class is akin to engaging in gambling activities.
“Regardless of the regulatory regime, their price volatility and absence of intrinsic value means that unbacked crypto assets will inevitably pose significant risks to consumers. Furthermore, consumer speculation in unbacked crypto assets more closely resembles gambling than it does a financial service.”
The Parliament also urges the government to regulate crypto trading as a form of gambling rather than as a financial service consistent with the principle of “same risk, same regulatory outcome.”
“We are concerned that regulating retail trading and investment activity in unbacked cryptoassets as a financial service will create a ‘halo’ effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.”
In April of 2022, the UK government announced plans to make Britain a global hub for crypto asset technology and investment. The new report proposes a set of actions for authorities following an inquiry that explored the role of digital assets in the country.
“We recommend that the Government takes a balanced approach to supporting the development of crypto asset technologies. It should seek to avoid expending public resources on supporting crypto asset activities without a clear, beneficial use case.”
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