• The United Kingdom believes that investing in cryptocurrency is similar to gambling and should be regulated in the same way.
• U.K. authorities believe crypto investing can be addictive, so necessary rules must be put in place to protect people from themselves.
• Not everyone is happy with the idea of regulating crypto as gambling, as it could negatively impact financial innovations within the U.K.
The United Kingdom Sees Crypto Investing as Gambling
To an extent, one can argue that investing in crypto is sort of a gamble. Whenever you buy bitcoin, Ethereum, or some other digital asset, you’re taking a chance… A chance that it could go down or up. You don’t know where it will be. The same idea applies to sitting down at a blackjack table. You could win big, or you could lose it all in a matter of minutes. In that sense, crypto and gambling are one and the same, and this is the idea that’s making its way into the financial operations of the United Kingdom. U.K. authorities believe that like gambling, investing in crypto can be quite addictive, and thus traders won’t always know when to stop thus necessitating regulations to protect people from themselves .
U.K.’s Suggested Regulations
Right now nothing is set in stone yet but laws and rules are merely being suggested to the U.K Parliament . Conservative MP Harriett Baldwin explains: „Effective regulation is clearly needed to protect consumers from harm… Consumers trading of cryptocurrencies like bitcoin more closely resembles gambling than a financial service and should be regulated as such.“ Should these rules pass many analysts believe they will eventually influence future crypto regulations in the United Kingdom including those under European Union’s MiCA regulations recently passed .
Some Are Unhappy With Regulations
Not everyone agrees with what’s going on however . A special committee under Treasury released a report claiming that crypto and blockchain are part of financial innovations which shouldn’t governed under Financial Conduct Authority (FCA). The report said: „It is not the government’s role to prohibit consumer access to high risk investments.“ This means certain aspects of potential regulation may still need further discussion before any decision can be made on how best to apply them while protecting investors without stifling innovation .
Protecting Consumers From Harm
Ultimately , U K authorities have good intentions regarding this proposed regulation : they want to protect consumers from harm by providing clear guidance on their rights and obligations when trading cryptocurrencies . It remains uncertain if these new regulations will pass but if they do , expect them to influence future cryptocurrency regulations throughout Europe .