The Central Bank of Ireland (CBI) has arrived fashionably late to the growing list of financial regulators and central banks, warning crypto risks to consumers.
Crypto Investors Beware of Risks
The bank’s warning is a part of a European-wide awareness campaign. Led by the European Supervisory Authorities, the drive warns consumers on “highly-risky and speculative” crypto-assets.
“These are not suited for most retail consumers as an investment or a means of payment or exchange,” it read.
The CBI has stressed people to be “alert” to misleading cryptocurrency advertisements, particularly on social media.
Although these investments lure people by the high returns advertised, the reality is that they carry significant risk, according to Derville Rowland, Director General Financial Conduct. He said,
“In Ireland and across the EU, we see increasing levels of advertising and aggressive promotion of crypto-asset investments. Before you buy crypto assets, you need to think about whether you can afford to lose all the money you invest.”
Currently, Ireland does not regulate cryptocurrencies. The central bank and Governor Gabriel Makhlouf have issued repeated warnings on the perils around investing in cryptocurrency opportunities. He said last year,
“Our role is to make sure that consumers are protected. I worry more about consumers making the right choices.”
The Governor insisted that crypto investors be prepared to “lose all their investments.” At the same time, another top official described crypto investments as a “great concern.”
Per a new release by Crypto Head research, a list of ten crypto-ready countries has placed Ireland 6th in terms of being ready for cryptocurrencies via various categories.
Ireland has 35 crypto ATMs around the country, which services 142,211 per ATM in a 775 square mile. Also, the government allows for crypto ownership and use.
Ireland Says CBDC Is ‘Inevitable’
As part of the Eurosystem, the central bank has been investigating the potential issuance of a central bank digital currency (CBDC) – a digital Euro.
The bank said that a digital Euro would exist alongside physical euro banknotes and coins rather than a substitute for them. CBDCs would fundamentally differ from cryptos like Dogecoin as it would be backed by the European Central Bank (ECB).
Governor Makhlouf, a pro-crypto man, has called CBDCs “inevitable” but cited their anonymity, allowing money laundering and criminal activities. He said last year,
“The introduction of a digital euro would represent a fundamental shift in the financial architecture of the euro area,” wrote Makhlouf.”
Meanwhile, CBDCs have been the talk of the town across Europe for the past years. UK Chancellor Rishi Sunak said in a social media post that a potential CBDC “Britcoin” would coexist alongside cash.
Furthermore, Gemini Payments, the Winklevoss brothers-run popular crypto exchange, has acquired an e-money license from the Central Bank of Ireland on Monday. Gemini has become the first fintech to secure such a license in the Republic since October 2020.