Openly supporting regulation, the UK government has refused a Treasury committee’s recommendation to treat retail crypto trading to gambling.
The United Kingdom has been witnessing multiple developments on the regulatory front for crypto. Crypto regulation is on course, with regulators aiming for a consensus on the matter. Along the same lines, a Treasury committee had recently prepared a report. It called for strict regulation and highlighted the risks associated with crypto. Unfortunately, the recommendations also compared retail crypto trading to gambling.
The UK government has come to the industry’s rescue with its response to the report. It has firmly conveyed its opposition to the proposal. Andrew Griffith, Economic Secretary, had written a letter to the Treasury, clarifying the UK government’s opinion. The House of Commons Treasury Committee report was, thus, strongly opposed by the government.
“The Committee’s proposed approach would therefore risk creating misalignment with international standards and approaches from other major jurisdictions including the EU, and potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission,” said the letter.
In the United Kingdom, gambling businesses like casinos and betting shops are regulated under the Gambling Act 2005. The crypto industry would have been subject to stricter rules if it was brought under the Act by the government.
The government also mentioned its initiatives to regulate the crypto industry. The new crypto bill of the UK was debated last month in the parliament. It said the government and the Financial Conduct Authority’s joint efforts were working towards effective regulation. Eventually, crypto trading firms would be made aware of the various compliances under the new crypto law. An appropriate crypto law could benefit the industry as well as investors.
The letter was also appreciative of the committee’s recommendations. It implied it would consider the suggestions when preparing the rules. The UK’s crypto law could come into effect by late 2023.
The government also stated how crypto trading should be treated at par with the financial services industry. According to the letter, the government believed a financial services regulatory framework was more appropriate for the industry. It was supportive of the many underlying benefits of crypto.
The United Kingdom has swung to action on crypto regulation after Europe passed the Markets in Crypto-Assets Act. With the UK’s actions, Europe could become a favorable crypto destination. In contrast, Asian economies like Hong Kong and Singapore have also performed well as crypto hubs. The UAE has already emerged as a crypto-friendly nation in the Middle East.
Despite recent standoffs with regulators in the US, crypto firms in the country are still bullish. It has been reflected in the crypto market’s highs in 2023. With more clarity from the government and an improving global economy, the crypto market could surge to record highs in the current year.