Cryptos have no intrinsic value and trading in them should be regulated like gambling, UK lawmakers say

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Trading in cryptocurrencies is akin to gambling and should be treated as such, British lawmakers said.

Unbacked tokens like bitcoin and ether aren't underpinned by underlying assets and have «no intrinsic value,» lawmakers on the U.K. Treasury Select Committee said in a report published Tuesday.

With a combined market capitalization of $737.7 billion, bitcoin and ether alone account for two thirds of all cryptocurrencies.

The events of the past year in the crypto industry — from the downfall of crypto exchange FTX to the decline of stablecoin experiment Terra — have drawn heightened scrutiny from regulators, who are concerned by negative effects on consumers.

In its Tuesday report, the Treasury Select Committee said the heightened volatility and potential to lose huge sums of money mean that cryptocurrencies pose significant risks to consumers, the committee said.

«Given retail trading in unbacked crypto more closely resembles gambling than a financial service, the MPs call on the Government to regulate it as such,» the lawmakers said.

«The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west,» Harriett Baldwin, chair of the Treasury Select Committee, said Tuesday. «Effective regulation is clearly needed to protect consumers from harm, as well as to support productive innovation in the UK's financial services industry,' she added.

»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