As stated in the official report published by the House of Commons Treasury Committee, cryptocurrencies do not carry any useful social purpose. For this reason, they must be regulated the same way as gambling.
In simpler words, UK officials will no longer associate tokens with financial assets, products, or services. While crypto is not backed by any physical asset or currency, it offers traders extended volatility. It exposes consumers to substantial losses or gains. At the same time, tokens do not deliver any useful social purpose for UK citizens.
Taking into account the above-mentioned characteristics, the UK Treasury recommends associating tokens with gambling. Furthermore, the Treasury has already established and officially introduced the new regulatory framework for cryptocurrency. It supposed more detailed classifications of stablecoins, rules, and regulations for crypto exchanges, issuers, ICOs, and other market participants.
It means that the previously stated intention to put cryptocurrency operations and trading activities under the Financial Services and Markets Act is disapproved. The Treasury representatives suggest unbacked assets can create the halo effect, making investors believe crypto operations are safer than other assets.
It is still unknown who exactly will regulate the crypto market. Will it be the Gambling Commission that currently regulates online and in-person gambling activities?
At least, the government worked out a set of baseline principles based on the same-risk-same-outcome regulatory model. It means that the government is the last resort to decide if an underlying cryptocurrency mitigates or raises risks. The main mission is to create the same regulatory outcome for all unbacked assets.
May the trading luck be with you!
