UK Lawmakers Clash Over Government Plans to Regulate Crypto as Financial Services
While some lawmakers support the government’s proposal, others consider volatile assets to be gambling activities and want them treated accordingly.
U.K. lawmakers appear divided on how best to regulate crypto assets in their nation. Some lawmakers appear to suggest crypto is gambling-like while others support government efforts to bring digital assets under existing financial services regulations.
Last month, the House of Commons Treasury Select Committee, comprised of 11 Members of Parliament, proposed that crypto should be treated like gambling due to its “no intrinsic value and extreme price volatility.” This suggestion caused instant industry backlash and more recently opposition by other lawmakers.
An All Party Parliamentary Group (APPG) for crypto assets comprised of 15 members of Parliament and Lords (from the upper chamber) issued their report supporting government plans to regulate crypto services as financial services on Monday.
U.K. lawmakers appear divided on how cryptocurrency should be treated by regulators in their nation, with some suggesting it is gambling while others backing government efforts to incorporate digital assets into existing financial services regulations.
Last month, the House of Commons Treasury Select Committee, comprised of 11 MPs, recommended treating crypto as gambling due to its “no intrinsic value and significant price volatility”. This suggestion caused instant industry outrage before more recently being opposed by lawmakers themselves.
On Monday, an All Party Parliamentary Group (APPG) for crypto assets composed of 15 Members of Parliament and Lords from the upper chamber released its own report which supported government plans to regulate crypto as financial services. It also recommended regulating these assets through financial regulatory authorities as part of the government proposal to treat crypto as financial services.
Advocacy “The APPG endorses HM Treasury’s position that cryptocurrency and digital assets should be regulated within existing and emerging financial services regulations, in order to mitigate risks to both consumers and investors,” according to its report.
Read more: UK Lawmakers Urge for Dedicate Government Role to Oversee Crypto Regulation
Chair Lisa Cameron presented several arguments supporting the government’s position to treat cryptocurrency as financial services at an event commemorating its publication by the APPG Crypto Report on Monday evening, most importantly tax collection.
Cameron stated his preference that individuals pay taxes when making gains in the UK, and believes this can only be accomplished via financial services regulation as opposed to gambling.
Diego Ballon Ossio, partner at Clifford Chance’s London practice and expert on tax matters told CoinDesk that gambling winnings do not incur taxes while investments usually do, per his statement to CoinDesk.
Cameron explained that a key reason cryptocurrency should be treated like a financial service is so the United Kingdom shares similarities with other jurisdictions when it comes to their regulatory regimes for financial services.
Global standard-setters have begun developing norms for crypto, while individual jurisdictions vary on how to regulate it. While the U.K.’s immediate neighbor, the European Union, has approved a tailored regime for cryptocurrency asset regulation while in America the Securities and Exchange Commission has taken multiple enforcement actions asserting certain crypto assets as securities.