By George Ward
The United Kingdom has set its sights on unveiling distinct cryptocurrency regulations within 12 months. This comes after the House of Commons revealed that crypto assets without underlying support lack intrinsic worth, and their volatile prices have the potential to result in substantial financial setbacks.
UK Lawmakers Propose New Regulations
Lawmakers in the UK emphasize the importance of implementing efficient regulations for crypto assets, asserting that such measures would catalyze innovation. Their argument revolves around the notion that these regulations should optimize the technology’s potential advantages for the country while mitigating associated risks.
Consequently, one of the key recommendations in the reports was that purchases of unbacked crypto assets are similar to gambling. The lawmakers noted that cryptocurrencies inherently lack natural value.
More importantly, their volatile prices can result in substantial losses. According to the House of Commons report, the government should classify transactions and investments involving unbacked digital currencies as gambling and not a financial service.
This approach aligns with their principle of ensuring relative risks follow regulatory policies. Under the Gambling Act 2005, gambling activities in the United Kingdom are subject to regulation by the Gambling Commission.
This comprehensive framework not only offers guidance but also aims to address concerns and problems arising from gambling. Additionally, the laws enforce stringent measures such as anti-money laundering and counter-terrorism financing to safeguard the integrity of the gambling industry.
Furthermore, the portfolio of businesses falling under the jurisdiction of the Gambling Commission encompasses a variety of establishments, including bingo halls, online betting firms, lotteries, betting shops, arcades, and casinos.
Aiming To Be A Crypto Hub
The viewpoint of Charles Randell, the former chair of the Financial Conduct Authority (FCA), aligns with this perspective. As mentioned in the report, Randell emphasized that speculative investments in cryptocurrencies can be considered gambling.
Therefore, such investments should be subject to appropriate regulation and taxation. In the meantime, the FCA acknowledges the escalating instances of crypto gambling addictions and highlights concerns regarding the inadequate provisions in the laws to protect consumers.
The UK’s considerations for regulating cryptocurrency follow their commitment to offering legislative guidance on investments in the local financial market. Andrew Griffith, the economic secretary to the UK Treasury, mentioned in a recent interview that dedicated crypto laws might be introduced within the next 12 months.
Reiterating the importance of uniform regulation, the legislator emphasized the need for consistent oversight over crypto assets and transactions. However, he recognized the potential opportunities within crypto assets and distributed ledger technology.
Griffith expressed a keen interest in harnessing those opportunities to the UK’s advantage. As the finance minister, Rishi Sunak, the current UK Prime Minister, said his vision is to position Britain as a “global crypto hub.”
The UK’s positive stance towards cryptocurrency is yielding favorable outcomes. In a recent interview, Patrick Hillmann, a top-level executive at Binance, lauded the regulatory environment in the United Kingdom but voiced criticism towards US regulations.
In the last ten years, the cryptocurrency sector has witnessed remarkable advancements, with the United Kingdom emerging as a prominent player in its expansion. The well-established finance industry of the UK has played a pivotal role in nurturing the growth of its cryptocurrency industry.