The U.K. government has reaffirmed its plan to regulate unbacked cryptoasset retail trading as a financial service instead of gambling. The denial came in reaction to the House of Commons Treasury Committee’s report on cryptoasset trading regulation. The committee mentioned that unbacked cryptoassets have no intrinsic value, and their price volatility exposes consumers to potential …
The U.K. government has reaffirmed its plan to regulate unbacked cryptoasset retail trading as a financial service instead of gambling. The denial came in reaction to the House of Commons Treasury Committee’s report on cryptoasset trading regulation.
The committee mentioned that unbacked cryptoassets have no intrinsic value, and their price volatility exposes consumers to potential for substantial gains and losses, while serving no useful social purpose.
“ These characteristics are more akin to gambling than a financial service, an impression reinforced by the evidence we have received of consumer behaviour, ” they added.
Many of the consumer hazards outlined in the report, as well as the urgent need for regulation, are recognized by the Treasury, according to Griffith. However, it “firmly disagrees” with the Committee’s decision. The government disagreed with the committee’s recommendation on gambling.
There are few reasons for the rejection of the recommendation. This includes that such a stance would be in direct conflict with globally agreed-upon recommendations from international agencies and standard-setting authorities and might create misalignment with international standards. As a result, the committee’s recommended strategy risks being out of step with international standards and methods from other key countries, particularly the EU. Besides, this may potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission.
A financial services regulatory framework will help to better handle the risks of unbacked cryptoassests and create conditions for safe innovation, according to the government.
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