UK lawmakers suggest cryptocurrencies to be regulated like gambling

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A panel consisting of lawmakers in the United Kingdom (UK), on Wednesday, May 17 suggested a regulation of cryptocurrencies in the country similar to that of gambling activities. However, concerned industrial firm CryptoUK intervened that keeping gambling on the same page to that of cryptocurrencies sector is not ideal.

This statement came as Britain wants to become a global hub for these currencies and the blockchain technologies related thereunder. It also wants to regulate the cryptoassets, as they currently fall under anti-money laundering regulations, and need separate regulatory to operate efficiently.

According to a report by Reuters, Bitcoin and Ethereum, two of the most popular cryptocurrencies, comprise two-thirds of all the cryptocurrencies. However, being decentralized, they are also not backed by any assets. The regulation of these currencies could, therefore, create a ‘halo’ effect to make people believe the activities to be safer.

We recommend the govt to regulate unbacked cryptoassets – Parliamentary Treasure Committee

The report from UK’s parliamentary treasure committee said, “We therefore strongly recommend that the Government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service, consistent with its stated principle of ‘same risk, same regulatory outcome’.”

Furthermore, the chairman of the committee Harriet Baldwin said, “The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west,” said Harriett Baldwin, chair of the treasury committee.”

In reply, CryptoUK’s official statement revealed, “We are both concerned and disappointed by these claims which are unhelpful, false, fundamentally flawed and unsubstantiated. The statement fails to reflect the true nature, purpose, and potential of the crypto industry.”

Earlier in 2022, FTX exchange saw a collapse, which led to regulation of the crypto sector, which has a market capitalization of $1.2 trillion, to be the need of the hour. In UK, around one-tenth of the population holds cryptocurrencies.

Gambling one of the most highly regulated sector in the UK

The activities related to gambling are one of the most highly regulated activities in the UK. In fact, government and related authorities bring in necessary changes to safeguard people from losing unreasonable monies. For example, UK government put a limit on gambling activities to encourage underground activities.

Now that many have opined differently on the regulation of cryptocurrencies in the UK, it remains to be seen if the regulations similar to that of gambling are levied on the crypto sector for safeguarding the public interest.