The governmental authorities have recently shared their views on a proposition put forth by a national legislator, suggesting that cryptocurrencies be regulated similarly to gambling. The authorities point out that while this would undoubtedly tarnish the reputation of digital currencies, it would also leave regulatory bodies in a quandary about how to handle situations such as the collapse of the FTX.
Impossible to Regulate Crypto as Gambling
To paraphrase, the UK government is of the belief that gambling regulatory practices would not be feasibly applicable to the crypto industry. They argue that these practices won’t suffice in safeguarding the public from potential risks associated with cryptocurrencies. Meanwhile, the idea of regulating cryptocurrencies akin to standard finance could generate a false sense of security among individuals, convincing them that investing in Bitcoin or Ether is as harmless as purchasing stocks, as proposed by a House of Commons committee earlier this week.
The country’s Treasury has expressed that a gambling-oriented regulatory system would not be adept at appropriately evaluating risk factors in the crypto market. Moreover, such a system would fail to rectify areas related to insider trading or market manipulation, which are competently handled by existing financial regulations.
“Adopting gambling regulation as the main regulatory framework would signify a radical departure from the Government’s current stance, which closely aligns with the recommendations of global standard-setting entities,” the government further stated, adding that a considerable number of financial specialists concur with this evaluation.
The UK, despite its efforts, is yet to establish a cohesive approach to cryptocurrency regulation. The nation seems to be falling behind its counterparts, including the European Union. The bloc of countries it departed from not too long ago, is progressing at a faster pace, dealing with the new issues that have emerged as a result of this departure, and is indeed ahead in establishing regulatory frameworks for crypto.
The serving Prime Minister, Rishi Sunak, vowed to transform the UK into a leading hub for the cryptocurrency industry. However, the progress towards this ambitious goal has been slow.
