(Bloomberg) – The Central Bank of Ireland is “very concerned” about the risks posed by unsecured cryptocurrencies to retail customers, its governor has said.
These assets offer “no social value”, Gabriel Makhlouf told an Irish parliamentary committee on Wednesday, comparing them to Ponzi schemes.
People are “essentially gambling” when investing in unbacked cryptocurrencies, he said. “When you play you can win, but most of the time when you play you lose. If people want to play, we should let them play.
“If you put your money in unbacked crypto, you have to be prepared to lose it all,” he added.
Bitcoin has lost more than 60% of its value in the last year, making a point made by policymakers true: Commodities like this are far too volatile to be considered a currency. With the entire crypto industry in freefall following the recent collapse of FTX, the calls are getting louder and louder to find better ways to control it.
- Makhlouf called for a ban on advertising of unbacked cryptocurrencies to young adults if lawmakers can ‘find a way’, citing an ‘uncomfortable’ level of ads aimed at them
- Risks to financial stability are “minimal”, but “safeguards” are needed to protect consumers from risks, he said.
©2023 Bloomberg LP