- The UK Treasury has officially rejected the recent proposal from the House of Commons Treasury Committee regarding cryptocurrencies.
- The House of Commons Treasury Committee argued that unsupported mainstream crypto assets like Bitcoin (BTC) and Ethereum (ETH) should be subject to the same regulations as gambling.
- In response to the committee’s concerns, Griffith stated that such a regulatory approach would contradict globally accepted standards and could potentially drive crypto activity offshore.
The proposal from the House of Commons Treasury Committee to regulate cryptocurrencies as gambling has been rejected by the UK Treasury.
The UK Government Does Not View Cryptos as Gambling
The UK Treasury has officially rejected the recent proposal from the House of Commons Treasury Committee. This means that cryptocurrencies will not be regulated as gambling instruments. The House of Commons Treasury Committee argued that unsupported mainstream crypto assets like Bitcoin (BTC) and Ethereum (ETH) should be subject to the same regulations as gambling. The committee’s report stated:
“Consumer transactions like cryptocurrencies that lack intrinsic value, exhibit significant price volatility, and provide no clear social benefits are more akin to gambling and should be regulated as such, rather than as a financial service.”
Andrew Griffith, the UK Economic Secretary to the Treasury, stated that he strongly disagrees with the committee’s proposal to regulate retail transactions and investment activities involving unsupported crypto assets as gambling.
In response to the committee’s concerns, Griffith stated that such a regulatory approach would contradict globally accepted standards and could potentially drive crypto activity offshore. The government also expressed the view that such a law would not adequately address certain risks associated with crypto trading, such as market manipulation.
Cryptocurrency Regulation in the UK
The government clarified that it is already working on cryptocurrency asset regulation, and proposed rules were presented to parliament last month. In its response, the government said:
“The Treasury and the Financial Conduct Authority (FCA) will work together with the industry to ensure that crypto firms are fully aware of the standards they need to meet for FCA approval under the FSMA gateway.”
There will be further communication in the future to ensure that the necessary standards for approval for crypto firms operating in the UK are clear. UK regulators have made progress in cryptocurrency regulation to address global concerns related to the industry’s risks.
The House of Lords recently approved the Financial Services and Markets Act, aimed at regulating Bitcoin and cryptocurrency regulations in the country. The law, referred to as “a rocket boost for the UK economy,” aims to create a “technologically advanced financial services sector” and promote economic growth.
