UK calls for regulation of cryptocurrencies as gambling

According to representatives of the Treasury, investments in digital assets are associated with increased risk

17.05.2023 - 07:20

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3 min

What’s new? Members of the UK Treasury select committee urged the government to abandon plans to regulate cryptocurrencies as a financial service and start treating these assets as gambling. In their opinion, proposals to regulate the crypto industry put forward by the Financial Conduct Authority (FCA) could create a false impression about the safety of cryptocurrencies and attract users to invest in speculative assets, the Financial Times reports.

Material on the FT website

What else is known? According to Harriett Baldwin, the Treasury select committee’s chair, trading in cryptocurrencies, such as bitcoin, is more akin to gambling than a financial service and should be regulated accordingly. Officials also noted the high price volatility and lack of intrinsic value in this type of asset, adding that the events of 2022 highlighted the risks the industry poses to consumers.

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The committee also criticized the HM Treasury and the Royal Mint’s initiative to create non-fungible tokens (NFTs). Officials noted that authorities should avoid spending public resources to support crypto-asset-related activities without a clear and profitable use case scenario. In this, the HM Treasury said it had suspended plans to issue NFTs indefinitely back in late March.

About the regulation of cryptocurrencies in the UK. Earlier this year, the country imposed tax breaks for foreign investors buying cryptocurrencies through local brokers. In March, local banks began to set limits on the purchase of digital assets with debit cards and completely prohibit their payment by credit cards.

In the same month, it became known that from 2025 the UK will require citizens to declare income from cryptocurrencies. It is expected that this step will bring an additional $12 million to the state budget.

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