- A group of UK lawmakers said that crypto buying is more like gambling than financial investing
- The UK Treasury Committee said that gambling laws are more suitable for regulating crypto than financial regulations
- The UK is working on adopting digital currencies and appears to be leaning towards regulating them as a financial offering
The UK Treasury Committee has claimed that investing in crypto “closely resembles gambling” amid concerns over the government’s plans to adopt digital assets. The cross-party lawmakers commented in a report that cryptocurrencies should be regulated using the UK’s gambling laws instead of treating them as financial services. The Committee also expressed concerns about the government’s proposal, stating that it could generate a misleading “halo” effect which could give consumers a false sense of security and protection over crypto assets.
“No Intrinsic Value”
The UK is one of the few countries in the world working on active adoption of digital assets, hoping to turn the country into a development hub at a time when the likes of the US are doing their best to outlaw crypto use and complicate development in the country. Part of this adoption process requires the government to solicit feedback on its plans, and it recently asked industry members to share feedback on its proposed rules, which includes a desire to regulate crypto using existing financial markets rules.
However, the Treasury Committee said it was “concerned” about this plan, arguing that with “no intrinsic value, huge price volatility and no discernible social good”, trading of cryptocurrencies “more closely resembles gambling than a financial service, and should be regulated as such.” Customers should be aware that they could lose their investment, the Committee continued, which is a message that the UK’s financial watchdog, the Financial Conduct Authority, has been at pains to point out in recent years.
Finance Ministry Sticking to Its Guns
Not everyone agrees with this perspective, however. In an email to Coindesk, a spokesperson for the UK’s finance ministry said that the risks posed by crypto are “typical of those that exist in traditional financial services” and added that it is the “financial services regulation – rather than gambling regulation – that has the track record in mitigating them.”
