HM Treasury, the finance and economic ministry of the United Kingdom has strongly rejected the proposals by the Treasury Committee of the House of Commons for the regulation of the cryptocurrencies analogous to gambling. In this respect, back in May this year, the UK Treasury Committee proposed that the regulation of unsupported crypto assets should be done analogous to gambling.
UK Does Not Agree with the Recommendations for the Regulation of Crypto Assets as Gambling
At that time, several policymakers noted that speculation related to these assets is like gambling to a great extent as compared with a financial service. Nonetheless, Andrew Griffith (the Financial Services Minister of the country) responded to this. The minister stated that the Exchequer does not consent to the recommendation made by the policymakers for the treatment of crypto assets like gambling.
As per Griffith, placing the cryptocurrencies within the category of gambling for their regulation could remain ineffective to minimize several hazards like the commingling of client funds as allegedly done by the now-bankrupt FTX. Griffith added that this would potentially pay no attention to market manipulation, inappropriate prudential arrangements, as well as the vulnerabilities in the main practices for the management of financial risks.
An agenda for the regulation of financial services is additionally suitable for dealing with the hazards of unsupported cryptocurrencies and establishing the conditions for secure innovation. Apart from that, the authorities stated that the government is already endeavoring to regulate the market of cryptocurrencies. In this respect, a proposed regulatory bill was put in front of the parliament.
The bill may take effect by this year’s end, as added by the government. According to the authorities, the FCA and HM Treasury will work in collaboration with the market to guarantee that crypto companies are completely in the knowledge of the standards specified for authorization at the gateway of the FSMA.
Although the country’s authorities have rejected the proposal for the regulation of the crypto within the classification of gambling, they agree with the conclusion made by the Treasury Committee that the use of particular cryptocurrencies and the core technology could pave the way for improvements in the sector of payments and financial markets.
This is in line with the ambitions of the United Kingdom to turn into a hub of crypto assets, as proposed by Rishi Sunak (who was then UK’s finance minister). Apart from that, the Exchequer has opened its hands to the suggestion made by the committee for a stable approach to backing the innovation, taking into account the techniques dealing with cryptocurrencies.
In other words, it believes that there is a consistency between this recommendation and the approach of the present government in the country. The respective approach is primarily focused on the regulation of the operations dealing with crypto assets to clarify the tax treatment in this respect. This also deals with taking part in specific organizations that operate internationally to assist in developing and shaping global recommendations and standards.
The Country Also Plans to Offer Financial Market Infrastructure Sandboxes for Experimentation with Blockchain Technology
Keeping that in view, the authorities in the United Kingdom are also making a strategy to create Financial Market Infrastructure (FMI) sandboxes. They would be specified for the entities to test the burgeoning blockchain technology. In this way, the market would likely become additionally transparent, resilient, and efficient to provide more opportunities to consumers around the world.