UK lawmakers are split on how to regulate digital assets, with some suggesting crypto should be treated like gambling and others supporting the government’s efforts to bring crypto into the scope of existing financial services regulation. Last month, the House of Commons Treasury Select Committee recommended that crypto should be treated like gambling because it has no intrinsic value and huge price volatility. This suggestion was met with industry backlash, and more recently opposed by other lawmakers.
The All-Party Parliamentary Group (APPG) for crypto assets, made up of 15 members of Parliament and Lords, released its own report on Monday, which backed the government’s proposal to treat crypto as regulated financial services. Chair Lisa Cameron listed some reasons why it supports the government’s position to treat crypto as financial services – chief among them being tax collection. I like people to pay tax when they make gains in the UK and it’s very important that that’s harnessed and that can only be achieved under the financial services regulation rather than gambling, Cameron said.
The APPG report also noted that the UK’s financial services regulations offer the best and most robust protections possible for local consumers. Risks posed by crypto are typical of those that exist in traditional financial services and it’s financial services regulation – rather than gambling regulation – that has the track record in mitigating them, a spokesperson for the finance ministry said.
The UK government has said it wants to bring forward specific crypto regulations in phases. The first step includes passing the new Financial Services and Markets Bill that is set to give multiple regulators more powers to supervise crypto. After the bill passes, the detailed laws that bring crypto into the regulatory fold would need to be agreed on by both houses of Parliament.