British Lawmakers Want to Introduce Gambling-like Regulations for the Crypto Industry

Lawmakers in the British parliament are now recommending regulating the crypto investment in the same way as the gambling industry. The country has been working on bringing new laws that can help keep a more check and balance on the volatile industry.

This recommendation came the after the EU (European Union) ministers decided to enforce tougher tax rules regarding crypto transactions. There has been a growing concern globally regarding the lack of supervision in the cryptocurrency sector.

Treasury Committee Expresses Its Concerns

The Treasury Committee mentioned in a report that digital assets including cryptocurrencies have no inherent value. Therefore, there price fluctuations and high volatility can leave consumers exposed to high profits or losses without any purpose.

A powerful cross-party group in parliament, the Treasury Committee is chosen by the House of Commons. According to the consumer data that the committee gathered, it believed that the crypto market should have similar regulations to the gambling market.

Treat Crypto Assets the Same Way You Do Gambling: Treasury Committee

The committee further highlighted how cryptocurrencies have more or less the same features that you find in gambling. Therefore, they advised against considering it as a financial service.

As a result, the committee has recommended the government treat unbacked crypto assets the same way that they do for gambling. The global cryptocurrency market saw a major increase in demand after the Covid-19 pandemic.

Individual investors caused the price to soar and reach a market capitalization of around $3 trillion by the last quarter of 2021. Ever since then, it has seen a major decline and is currently standing at around $1.1 trillion. This shows a major decline of more than 60% in less than 2 years.

The crypto industry has been trading to get acceptance from traditional finance. However, it has been rattled by a wide range of scandals, such as the collapse of Terra and FTX in 2022. These major setbacks have led to huge losses for investors.

Additionally, Treasury Committee also showed their concerns regarding the potential risks due to the poorly handled business in the industry and the increasing usage of digital assets by criminals and fraudsters.

The UK government under Rishi Sunak plans on creating a regulatory framework for digital assets including cryptocurrencies so it doesn’t lag behind the European countries and the United States.

In addition to this, the committee’s report also emphasized the government’s role shouldn’t be to promote the new digital assets just for the sake of innovation. They should consider all the parameters and take a look at the bigger picture.

The committee also criticized the UK’s unsuccessful attempt to sell non-fungible tokens (NFTs) based on the same technology as crypto. However, it did commend the country’s proposal for fighting the regulations for professional crypto investors.

The report by the committee also highlights the potential that cryptocurrencies have for improving efficiency and decreasing transaction costs.

European Union Approving the First Set of Comprehensive Laws

The European Union is now stepping up its efforts to protect its consumers. The EU finance ministers decided to target the individuals who have stashed their wealth in these unregulated locations.

In April, the EU parliament approved the extensive rules regarding crypto assets. It continues to work on a robust framework that can help the nations in the EU to monitor, track, and access the data regarding cryptocurrency transactions.