• The United Kingdom has ambitions of becoming a crypto hub, but these plans are being thwarted by lawmakers who want to regulate digital assets like gambling.
• A panel of UK lawmakers said that cryptocurrencies should be regulated as gambling due to potential use by fraudsters and risks to consumers.
• The Treasury Committee said regulating these activities could lead to consumers thinking the activity is safer than it is, or that they’re protected when they’re not.
UK Plans to Become Crypto Hub Thwarted
The United Kingdom has grand aspirations of becoming a digital assets hub, just as London already is for traditional finance. However, those plans are being thwarted by watchdogs and policymakers who want to take a heavy-handed approach to regulation.
Crypto Assets Should Be Regulated As Gambling
On May 17, it was reported that a panel of UK lawmakers said crypto assets should be regulated as gambling “given they are potentially used by fraudsters and pose significant risks to consumers.” The report from Parliament’s Treasury Committee added that cryptocurrencies are not backed by any currency or asset which leads to “volatility in prices and the potential for all money invested in them to be wiped out.”
Similar Stance To US Policymakers
It is a similar stance taken in the United States where a number of policymakers have labeled digital assets as everything from ‘shadow banking’ to ‘casino chips’.
Creating ‘Halo’ Effect With Regulation
The UK Treasury Committee said regulating retail trading and investment in unbacked cryptocurrencies could create a ‘halo’ effect which could lead people thinking the activity is safer than it is or that they’re protected when they’re not.
In conclusion, Britain’s plans for becoming a crypto hub may be on the rocks due to lawmakers wanting cryptocurrencies such as Bitcoin regulated as gambling due the potential use by fraudsters and risks posed on consumers. If regulation were introduced it would create an illusion that investing in cryptocurrency would be safe when this isn’t necessarily true.