The ambitions of the British crypto hub are faltering because the Ministry of Finance wants to treat it as a gambling

The ambitions of the British crypto hub are faltering because the Ministry of Finance wants to treat it as a gambling

The United Kingdom has great ambitions to become a center for digital assets, as London is already for traditional finance.

However, these plans are thwarted by supervisory authorities and political decision -makers who want to pursue a tough approach in the regulation.

On May 17, it was reported that a committee of British legislators said that crypto-assets should be regulated as a gambling "because they are potentially used by fraudsters and represent significant risks for consumers".

The report of the Finance Committee of Parliament added that cryptocurrencies are not covered by a currency or asset. According to Reuters, this leads to "volatility of the prices and the risk that all of the money invested in them".

crypto is gambling, not finance

It is a similar attitude as in the United States, where a number of political decision-makers have described digital assets as everything from "shadow banks" to "casino chips".

The British Finance Committee said that the regulation of retail trade and investments in unsafe cryptocurrencies could cause a "Halo" effect. This could lead to consumers thinking that activity is safer than it is or that they are protected, although this is not the case.

"We therefore strongly recommend that the government regulates retail trade and investment activity in unsafeive cryptoassets as a gambling and not as a financial service, in accordance with its explained principle 'same risk, the same regulation result'."

Harriett Baldwin, chair of the finance committee, described the industry as "wild west". She said the events of 2022 had made the risks for consumers clear.

In April, the Economic Minister of the British Ministry of Finance, Andrew Griffith said that crypto regulations will be introduced within the next 12 months.

The views of Sunak and Bailey

Prime Minister Rishi Sunak is interested in promoting the country as a crypto hub, but is of great resistance from the Ministry of Finance and the Central Bank.

The governor of the Bank of England, Andrew Bailey, has repeatedly argued that Bitcoin and his brothers have "no inner value". British banks are also increasingly refusing to work with crypto companies and build barriers for their customers.

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