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- The Treasury Select Committee consisted of members of Parliament.
- Additionally, it will impose the highest tax rate on cryptocurrency gaming earnings.
According to a recent recommendation from a UK regulatory body, unbacked cryptocurrencies such as Bitcoin (BTC) should be classified as gambling for retail investors. The Treasury Select Committee, a cross-party group of Parliament members, “strongly recommended” this classification for digital asset trading in a report published on Wednesday, May 17.
This recommendation stems from an extensive examination of the most effective ways to oversee crypto assets. However, regulating cryptocurrency trading in the same manner as gambling would contradict trends observed in other countries.
The report stated:
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“We are concerned that regulating retail trading and investment activity in unbacked cryptoassets as a financial service will create a ‘halo’ effect that leads consumers to believe that this activity is safer than it is, or protected when it is not.”
No Intrinsic Value and Huge Price Volatility
Currently, approximately 10% of individuals in the UK own some form of cryptocurrency. The convention requires that the UK government respond to the report within two months of its publication.
The UK committee asserts that digital assets possess “no intrinsic value, significant price volatility, and no identifiable social benefit,” which is why they liken Bitcoin investment to sports betting. This sets them apart considerably from more traditional forms of investment.
Furthermore, it will impose the highest tax rate on cryptocurrency gaming earnings. Similar to the gaming sector, crypto participants will be required to verify client identities and implement anti-money laundering measures.
The actions taken by the United Kingdom are not without precedent. Nations such as Singapore have enacted measures to limit cryptocurrency trading at the retail level. According to authorities in Singapore, most individuals should refrain from investing in cryptocurrencies due to their high volatility.
