The U.K. Parliament has released a 28-page report proposing to regulate cryptocurrencies that are not backed by real assets as gambling.
The study stresses that such cryptocurrencies, including bitcoin and ether, could potentially be used for fraud and money laundering.
They, according to parliamentarians, pose a great risk to consumers and the economy.
“Such assets have no intrinsic value, they are highly volatile, and they do not represent discernible social benefits.
Trading uncollateralized cryptocurrencies is more akin to gambling than financial services, so these assets should be regulated similarly,” the researchers wrote.
Note that a full-fledged regulation of the cryptocurrency industry is now being developed in the UK.
Parliamentarians warned that if the law regulates cryptocurrencies as financial assets, it could create a false sense of security for consumers.
That said, despite the negative view of cryptocurrencies, the report notes the possibility of using blockchain in the country’s financial industry.
In early May, an amendment to the U.K.’s Financial Services and Markets Bill was introduced to allow FCA-registered cryptocurrency companies to independently approve their own advertising.