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A panel of UK lawmakers said in a report that cryptocurrencies should be regulated as gambling.
On the heels of the news, the head of a global regulatory body announced that the group would soon submit the first set of international standards for crypto assets.
And after all, member states of the European Union approved the world's first complete set of laws to regulate cryptos on Tuesday, putting pressure on other nations like the United Kingdom and the United States to follow suit. Asia is also racing ahead on crypto rules.
The United Kingdom is working on its first regulations for digital currencies, which will expand upon the present anti-money-laundering requirements.
The parliament's Treasury Committee study stated that bitcoin and ether, which comprise two-thirds of all cryptos, are not backed by any currency or asset, causing price volatility and the possibility that all money invested in them may be lost.
The report warned that if retail trading and investing in unbacked cryptocurrencies were regulated, it might create a 'halo' effect, making consumers believe the activity is safer than it actually is.
That aligns with UK Financial Conduct Authority's (FCA) repeated warnings.
FCA has said on several occasions that around 10% of UK adults hold cryptos and risk complete financial ruin by investing in the tokens.
But on Tuesday, the European Union (EU) passed the first global regulations for the cryptocurrency sector and said the underlying technology might help streamline financial transactions, including cross-border payments.
In April, the European Parliament adopted guidelines negotiated by EU finance ministers in Brussels, ratified by all EU states.
The rules are expected to kick-in in 2024.
A deep dive into the EU's regulations shows that companies that wish to create, trade, or secure crypto assets, tokenised assets, or stablecoins within the 27-nation bloc must comply with the regulations and get a licence.
The government has made it simpler to trace transactions to crack down on tax evasion and the exploitation of digital currency transfers for money laundering.
They settled on January 2026 as the date by which service providers must start collecting the names of both senders and recipients when transferring cryptos, regardless of the value of the transaction.
There was also consensus on exchanging data on advance tax decisions for the wealthiest persons and updating guidelines on how member nations collaborate in taxes to include crypto-asset transactions.
The worldwide market capitalisation of crypto assets is around US$1.2 trillion, a small fraction of the financial system; yet, last year's failure of the FTX exchange, a crypto company, increased the urgency of regulating the industry.
Global Regulations Soon
The SEC of the United States, the Financial Services Authority of Japan, and the Financial Authorities of the United Kingdom, Germany, and France are among the organisations that have pledged to implement the International Organization of Securities Commissions (IOSCO) proposals.
According to a Reuters report, Jean-Paul Servais, chair of global securities regulatory body IOSCO told an event held by the Managed Funds Association in Paris, said: "Once finalised, the recommendations will deliver a first globally coordinated set of rules for crypto-assets."
As a result of recent market developments and the demise of prominent cryptocurrency players like FTX, "my determination to deliver on this agenda" has been bolstered, as Servais put it.
Servais added, "As I have repeatedly said, the IOSCO recommendations will clarify the extent to which existing principles and guidance could apply to cross-border virtual assets and services providers."
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