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Ireland’s Central Bank Chief Warns of Risky Cryptocurrencies, Calls for Regulation

ireland Gabriel Makhlouf

The recent performance of cryptocurrencies has left many financial experts and lawmakers in awe. Now, everyone is chomping at the bit to make comments on them. This week, Gabriel Makhlouf, the Governor of the Central Bank of Ireland, raised concerns about cryptocurrency investments and the risks involved.

A Risky Space that Regulators Should Monitor Closely

Speaking in an interview with Bloomberg, Makhlous, who also sits on the European Central Bank (ECB) ‘s governing council, explained that he is a massive believer in cryptocurrencies and their ability to transform the global economy. However, the policymakers also explained that the industry remains highly risky.

Makhlouf explained that local regulators would need to wake up to the challenge of ensuring consumer protection in the crypto space. Considering that more people are making investments in the space, regulators would undoubtedly have to step in.

“Personally, I’m not sure why people invest in those sorts of assets, but they see them as assets clearly, and they see them as investments. Our role is to make sure that consumers are protected. I see that as the main role, I don’t see financial stability issues at the moment arising from Bitcoin itself. I worry more about consumers making the right choices,” the policymaker said. 

Regulations in the Forefront Again

The Irish policymaker also echoed a recent warning from the United Kingdom’s Financial Conduct Authority (FCA). Following Bitcoin’s astronomical rise – and equally drastic fall – earlier this year, the FCA published a statement warning the public about their crypto holdings’ safety.

Citing risks like product complexity and price volatility, the FCA emphasized that crypto lending and investment are incredibly risky endeavors. While it didn’t discourage people from playing in the market, it asked that they be ready to lose all their money if things go south.

The FCA also explained that crypto investors would most likely not get help from any major consumer protection institutions like the Financial Service Compensation Scheme or the Financial Ombudsman Service if anything goes wrong.

Asides from the FCA, calls for crypto regulation have also intensified across the world. Earlier this month, Christing Lagarde, the ECB’s President, called for regulators to be more aware of their crypto industries as the assets’ risks are becoming more prominent.

With cryptocurrencies gaining more mainstream adoption, there is little to no doubt that this year will see some significant policies being rolled out by governments.

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      Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.

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