Lawmakers Urge the Government to Consider Crypto as Gambling

A recent argument on cryptocurrencies in the U.K. parliament led to the conclusion by some MPs that Cryptocurrency trading serves no social purpose and that it should come under the legal legislation of “Gambling”.

The entire E.U. and reports coming from the U.K. suggest that the government is creating a legal framework around crypto. Amidst all the talk a panel of Britain lawmakers has termed trading these highly volatile assets which include “Bitcoin and Ethereum” as “Gambling”

The view of U.K. lawmakers

The published report by the treasury committee puts emphasis on the fact that the widespread cryptocurrency lacks oversight in trading. Earlier a report published by the treasury committee in 2018 labeled the entire crypto sector as the “wild west”.

The committee reflected on their past comments and further justified in their recent report that their impression remains the same and it hasn’t changed.

The committee mentioned a few things in their report about cryptocurrency. The report noted that the blockchain might have many advantages, but the crypto market is currently dominated by consumer speculation in unbacked crypto assets such as Bitcoin and Ethereum.

The committee added that the characteristics of these assets resemble more gambling than financial service. The committee backed itself by saying that the impression that they have is backed by evidence on consumer behavior.

“Unbacked crypto assets have no intrinsic value, and their price volatility exposes consumers to the potential for substantial gains or losses while serving no useful social purpose.

Committees take on regulating Crypto assets

Both retail and popular demand by various authorities have asked for the regulation of crypto under the Financial Conduct Authority. While crypto regulation is believed to be a positive step the committee warned regarding this.

The committee has expressed its views by stating that regulation of such assets can create a “Halo effect”. The committee said that regulation can lead people to believe these as legitimate financial products and that they can run along the traditional finance products.

The committee further urged the government to declare trading and investment in cryptocurrency as gambling rather than a financial service. An outcome in favor of the report would mean that the body to make regulations would be the gambling commission and trading firms that want to allow crypto-related services will require a gambling license.

CrytpoUK’s response to the committee reports

Ian Taylor who is the board advisor at CryptoUK expressed her views against the report calling it false, fundamentally flawed, and unsubstantiated. Ian further added that the report is very disappointing and lacks an understanding of the potential of the crypto industry.

“Furthermore, gambling is exempt from capital gains tax. Does the Government really wish to exclude tens of millions of pounds in tax income from gains made by the buying and selling of unbacked crypto assets?”

The report presented by the committee did not mention ‘Britcoin’. Britcoin is a digital currency that the Bank of England plans to launch and whose value will be tied to the value of the pound.