Last week (July 20) the Treasury committee published the government’s response to its report which said consumer trading in unbacked cryptoassets should be treated as gambling.
Often called cryptocurrencies, they are not supported by an underlying asset and are the most common form of crypto.
The committee claimed their price volatility and risk of losses meant they “more closely resemble gambling than a financial service and should be regulated as such”.
A response from Andrew Griffith, economic secretary to the Treasury, said the department “firmly disagrees” with the committee’s recommendation.
He said it would risk the UK not aligning with international regulations.
The MP wrote: “A financial services regulatory framework is more appropriate for addressing the risks of unbacked cryptoassets and creating the conditions for safe innovation.
“This can – and will – come with a set of robust measures to mitigate consumer risks mentioned in the committee’s report, including the risks of ‘consumers getting misinformed’.
“The government is already taking concrete action on this, through the introduction of a dedicated financial promotions regulatory regime for cryptoassets: legislation was laid before Parliament and debated last month, and will be in force by late 2023.”
tara.o’connor@ft.com
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