Following a new inquiry into the industry, the Parliamentary Treasury Committee has called on the UK government to start regulating cryptocurrency trading as a form of gambling rather than a financial service.
Why effective regulation is needed:
In a report issued on Wednesday, MPs said: “The government must avoid wasting more taxpayer funds promoting tech innovations such as digital tokens, without demonstrating the clear benefits to the public.” Furthermore MPs concluded that “like gambling, cryptocurrency trading and investing can be addictive.”
And although the underlying blockchain technology could bring many benefits in the broader financial services industry, the process of wagering on the fluctuating price of an unbacked asset like bitcoin could result in consumers losing huge sums of cash. In this regard, the Conservative MP and Chair of the Treasury Committee, Harriett Baldwin, said: “Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK’s financial services industry. However, with no intrinsic value, huge price volatility and no discernible social good, consumer trading of cryptocurrencies like bitcoin more closely resembles gambling than a financial service, and should be regulated as such. By betting on these unbacked tokens, consumers should be aware that all their money could be lost.”
Plans to officially regulate cryptocurrencies are currently under consideration:
Government’s intentions to officially regulate cryptocurrencies could be affected by the recommendations. In addition, the plans are being reviewed following a consultation earlier this year. Furthermore, it has been widely predicted that cryptocurrency trading will ultimately fall under the Financial Conduct Authority, which is right now responsible for making sure that firms comply with money-laundering rules and will soon be given oversight of advertisements.
However, the Treasury Committee said: “Treating cryptocurrency trading or investing like a financial service and regulating it via the FCA risked creating a halo effect that could lead consumers to believe the industry was safer than it is or that they were protected from financial losses, when they are not.”
The report said that “regulating cryptocurrencies as gambling would be consistent with the government’s principle of same risk, same regulatory outcome.” It also highlighted the government’s recent try to produce an irreplaceable token through the Royal Mint. NFTs are one-of-a-kind digital advantages stored on a blockchain, the same decentralized ledger of transactions used to purchase and sell cryptocurrencies like bitcoin. However, the project, criticized by Labour as a “crypto gimmick” was written off in March, just under a year after the project was reported. In this regard, the Treasury Committee said that “it was calling on the government to take a balanced approach to technology and avoid expending public resources on supporting cryptoasset activities without a clear, beneficial use case. The failed NFT project was a case in point. It is not the government’s role to promote particular technological innovations for their own sake.”
Additionally, the Treasury and the CryptoUK industry group have been contacted for comment on this.
The legal status of online casinos in India is complex and varies by state. While there is no federal law that explicitly addresses online gambling, the legality depends on state regulations and the type of gambling involved.
Key Points:
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No National Law: India does not have a specific national law regulating online casinos. However, the Public Gambling Act of 1867 prohibits operating physical casinos and gambling houses, but it doesn't cover online platforms, leaving a legal grey area for online gambling.
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State-Specific Laws: Some Indian states, like Goa, Sikkim, and Daman, have legalized land-based casinos, and others, such as Sikkim, have also licensed online gambling. Many states have banned gambling altogether, including online gambling.
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Online Sports Betting: Betting on sports, particularly cricket, is very popular in India. However, it's only explicitly legal in some states like Sikkim and Nagaland, which have laws permitting online gaming and betting.
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Legal Gray Area: Many international online casinos accept Indian players and operate legally under licenses from offshore jurisdictions (like Curacao or the UK Gambling Commission). As long as players are gambling on licensed platforms, the risk is minimal, but local authorities may still choose to regulate or restrict online gambling.
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Cryptocurrency: Some Indian players prefer using cryptocurrencies (like Bitcoin) for online gambling, as it provides a layer of anonymity and security.
While online casinos aren't explicitly legal across all of India, many international casinos accept Indian players, and online gambling continues to grow in popularity. Players should ensure they use licensed platforms and understand local laws before engaging in online gaming.
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