Are UK MPs “Gambling” With The Public Perception Of Cryptocurrency Trading?

Who would have thought that someday cryptocurrency trading would compared to a roll of the dice?

As per a report from 17th May, according to Members of Parliament (MPs), cryptocurrency trading in the UK should be treated as a form of gambling and regulated accordingly. The Treasury committee, chaired by Conservative MP Harriett Baldwin, emphasized the need for effective regulation to protect consumers and support innovation in the financial services industry.

So, believe it or not, cryptocurrency trading could be treated as "gambling" in the UK soon!

Conservative MP and Treasury committee chair Harriett Baldwin, said, "Effective regulation is clearly needed to protect consumers from harm, as well as to support product innovation in the UK's financial services industry." She further continued, "However, with no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like bitcoin more closely resembles gambling than a financial service, and should be regulated as such."

Baldwin also emphasized that individuals betting on these unbacked "tokens" should be aware of the potential risk of losing all their money. #CryptoCarriesRisks

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So, with concerns over volatility and a lack of social value, it's a high-stakes debate that could tremendously reshape the crypto landscape.

However, on the flipside, the Treasury Committee cautioned against regulating cryptocurrency trading as a financial service through the Financial Conduct Authority (FCA). They feared that doing so might create a false perception of safety among consumers, leading them to believe they were protected from financial losses.

At the same time, the committee called for a balanced approach to technology, advising against allocating public resources to crypto asset activities without a clear and beneficial use case. It further highlighted a failed non-fungible token (NFT) project as an example of the government's unnecessary promotion of specific technological innovations. They stated that it was not the government's role to endorse such projects solely for the sake of innovation.

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In response, a Treasury spokesperson noted that the risks associated with cryptocurrencies were typical of those posed by financial services. They asserted that financial services regulation had a proven track record in mitigating these risks, emphasizing the need for such regulation over gambling regulation.

Nevertheless, the recommendations in the report could potentially shape the government's plans to regulate cryptocurrencies. These plans are currently under consideration following a consultation held earlier this year.

Do you think regulating cryptocurrency trading as gambling would align with the government's principle to regulate risks? Or will it create a false optimism about crypto? Let us know your thoughts in the comments.

First published on Fri, May 19, 2023

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Cryptocurrency Bitcoin UK Members of Parliament UK Gambling Trading Regulations Cryptocurrency Trading Harriett Baldwin

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