Blog: Cryptocurrency Legislation – What Are the UK Government Planning? – Qrius

Up until now, Crypto assets have been mostly unregulated in the UK with the likes of Cryptocurrency, NFTs and other digital assets not really falling under any regulation. For lots of people this has been part of their appeal, but it has left them open to manipulation and wrongdoing, which of course is something that the UK Government are keen to put a stop to. With digital currency increasing in popularity it was really only a matter of time before proper regulations were put in place and as such, it was no surprise to many when the UK Government announced earlier this year that they would be putting regulations in place.

What Are The UK Government Planning?

The UK has always been a country proud to be forward-thinking and at the forefront of technological changes, so it makes sense that they don’t want to be left behind when it comes to Cryptocurrency. As Economic Secretary of the Treasury John Glen says “If crypto technologies are going to be a big part of the future, then we, the U.K., want to be in — and in on the ground floor.”  

The United Kingdom’s Economic and Finance Minister recently announced that there are plans to look into Cryptocurrencies such as Stablecoin and whether they should be regulated. As it looks increasingly likely that digital currency is going to become an acceptable way to pay for retail goods, a consultation recently took place to see what this meant in terms of regulation and keeping people safe.  Of course, any introduction of financial regulations is going to be a lengthy process and talks first began at the start of 2021. It is thought that they are looking to introduce a number of measures to ensure that Cryptocurrency can be used safely and securely by those that wish to do so.

What Changes Can We Expect?

Although there have been no exact announcements about what regulations are likely to be put in place, it is easy to imagine what they could be introducing. The UK Government will look at how they have regulated certain betting offers from operators in the past when it comes to cryptocurrency legislation and use this as an example of how to proceed. Although many don’t see Cryptocurrency investment as gambling, the truth is that it can be incredibly volatile so some regulations should deal with this in the same way. Many will be worried that if measures that are too strict are introduced, then this could ruin the untraceable nature of Cryptocurrency and will be hoping a more sensible set of measures can be put in place.

One thing that is likely to be introduced is the licensing/regulation of Cryptocurrency platforms. Much like gambling operators in the UK, it is likely that those who wish to offer the facility to buy, sell or trade Cryptocurrency will need to be registered in order to do so. This gives consumers peace of mind that the service they are opting to sign up for is safe and secure. There is currently no such measure in place – and Cryptocurrency isn’t protected by any financial ombudsman or regulatory body so there is nothing in place to protect those that may be vulnerable to being scammed.

Another side to Cryptocurrency and digital assets that is also being investigated in terms of legislation is the advertising of Cryptocurrency services. It has always been the Advertising Standards Agency guidelines that no claims in adverts should be misleading or exaggerated. However, now that over 2 million people in the UK are said to own a Crypto asset there are likely to be guidelines surrounding this that relate directly to digital currency. This isn’t unusual; there are several industries that have guidance given to them by the Advertising Standards Agency. Changes put in place are likely to be making it clear that your investment can go down as well as up, and possibly highlight the fact that Cryptocurrency isn’t currently protected by any financial regulatory body. 

What This Means for Cryptocurrency Investors

Realistically, most people who already invest in digital currency have been expecting some sort of regulation for some time. Stocks and shares, gambling and other similar financial niches are all subject to their own set of rules and regulations and Cryptocurrency is unlikely to be any different. We don’t yet know the exact legislation that is going to be put in place, but for most that are already acting in the right, there should be no change. In fact, according to recent announcements by UK Government officials, they are keen for the country to become somewhat of a hub for Cryptocurrency and digital assets of this nature and too many strict rules could put a dampener on these plans.

Cryptocurrency may be a relatively new addition to currency options, but we have already seen it evolving massively, particularly over recent months. Not only are the likes of Bitcoin and Ethereum more accessible but there are also hundreds of other Cryptocurrency options available for those open to investment. What we have also seen over recent months is the popularity of loot boxes and microtransactions in gaming alongside NFTs becoming a more viable way to invest your money. The fact that these options are all becoming more popular will have undoubtedly helped the UK Government and other financial regulatory bodies recognise that they needed to step in to create some regulations.

Realistically, it is impossible to say what legislation the UK Government will have in place surrounding Cryptocurrency in the future, as we don’t know how things will evolve or what will become trendy. However, with things like the UK Gambling Commission in place just to regulate the gambling industry many believe that such a body could soon be in place to oversee the safe use of digital assets. For now, though, we’ll see an introduction of some Cryptocurrency regulations over the coming months and then it will be a matter of seeing how efficiently these work and how they may need to be adjusted in the future.


Disclaimer:

  • As per the Public Gambling Act of 1867, all Indian states, except Goa, Daman and Sikkim, prohibit gambling
  • Land-based casinos are legalized, with certain guidelines, in Goa and Daman, as per the Goa, Daman and Diu Public Gambling Act 1976  
  • Land-based casinos, Online gambling and E-gaming (games of chance) are legalized in Sikkim under the Sikkimi0Online Gaming (Regulation) Rules 2009
  • Only some Indian states have legalized online/regular lotteries as per and subject to the conditions laid down by state laws. Kindly refer to the same here
  • Horse racing and betting on horse racing, including online betting, is permitted only in a licensed premise in select states. Kindly refer to the 1996 Judgement by the Supreme Court Of India here and for more information
  • This article does not endorse or express the views of Qrius and/or any of its staff.

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