Reuters pointed out that the report specifically favors Bitcoin and Ethereum. According to the committee’s report, these cryptocurrencies make up two-thirds of all crypto-assets, but they are not backed by any specific currency or asset.
This very fact leads to large price fluctuations and increases the risk of losing all the funds invested in these virtual coins.
“We strongly recommend that the government regulate trading and investment activities in uncovered crypto-assets as gambling and not as financial services,” the committee’s final report said, adding that the restriction should also apply to retail transactions.
European cryptocurrency regulation is the strictest in the world
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A false sense of security
The report also warns that regulation must be well planned and presented to the public so that consumers do not get the false impression that regulated cryptocurrencies are completely safe. However, the UK’s Financial Conduct Authority has repeatedly warned consumers that there is a risk of losing all their invested funds in cryptocurrencies.
The organization CryptoUK, which represents the British crypto-asset sector, strongly opposed the report. According to her statement, crypto-assets cannot be put on the same level as gambling.
“We are disappointed by the allegations presented to us by the Finance Committee of the British Parliament. They are unhelpful, untrue, baseless and fundamentally flawed. They do not in any way reflect the true nature, purpose and potential of the crypto industry,” the union said.
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The EU has the strictest rules
This week, the EU Council, which represents the member states of the European Union, approved the rules for the regulation of cryptocurrency markets. In their current form, they represent the strictest international standard for trading virtual assets.
Thanks to the new regulation, intermediaries will be required to collect data on sellers and buyers to prevent money laundering and difficult circumvention of EU sanctions. The measure was introduced as a means to strengthen the security and transparency of the cryptocurrency market, Reuters reported.
The global market value of crypto-assets is now around 1.2 trillion dollars (approximately 26 trillion CZK), which is only a small share of the financial system. Last year’s collapse of the FTX cryptocurrency exchange highlighted the need for regulation of the industry, Reuters reported.
Bitcoins and other virtual currencies
There are many virtual currencies. One of the oldest and currently most popular are the so-called bitcoins. They were created as early as 2009, but have enjoyed greater popularity in recent years. This currency was created so that it cannot be influenced by any government or central bank.
Cybercoins are “minted” by a network of computers with specialized software programmed to release new coins at a steady but ever-decreasing rate. The number of coins in circulation should eventually reach 21 million, which should happen around 2140.
More and more people believe in Bitcoin. The owners broke the record
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