The UK Finance Committee has called for the regulation of cryptocurrency trading due to the lack of intrinsic value and social usefulness of digital currencies such as bitcoin and ether. The committee proposes that retail and investment activity in unsecured cryptoassets should be regulated as gambling rather than a financial service. Additionally, cryptocurrency consumes a lot of energy and is often used by criminals as a payment method.
The trade association CryptoUK has criticized the Finance Committee’s gambling comparison and suggests that “professional investment managers see Bitcoin and other crypto assets as a new alternative asset class – not as a form of gambling.” However, Great Britain is currently working on the regulation of cryptocurrency to bring more clarity to its citizens. The predecessor committee of the British Finance Committee had already called for stricter regulation in 2018 to protect consumers from the wild west.
The UK government is currently debating whether Her Majesty’s Revenue and Customs (HMRC) will be able to confiscate cryptocurrencies from companies in the future. In Europe, the MiCA regulation (Markets in Cryptoassets) recently approved by the European Council aims to create a regulatory framework for markets in crypto assets to protect consumers and investors from fraud and ensure financial stability. This includes a daily limit of 200 million for transactions with stablecoins, and any market abuse should be recorded. Providers of services for crypto assets operating in the EU require a license to prevent money laundering and the financing of terrorism.
