Ireland’s central bank director general for financial conduct is the latest official to point out issues of Bitcoin (BTC) and the cryptocurrency industry following a major market sell-off.
The growing popularity of cryptocurrencies like Bitcoin is “of great concern,” the Central Bank of Ireland’s Derville Rowland warned, Bloomberg reports Monday.
“Crypto assets are quite a speculative, unregulated investment,” and investors should be “really aware they could lose the whole of that investment,” Rowland stated after crypto markets shed nearly $1 trillion in a matter of days in one of the biggest historic crypto sell-offs.
Rowland’s perspective on the crypto is set to contribute to the global regulation of the space as the official will take over as chairwoman of the European Securities and Markets Authority’s investment management standing committee in July. Earlier this year, the financial authority outlined the same concerns around crypto, stating that these types of assets are not regulated and pose significant risks for investors due to its highly volatile nature.
One of the top executives at Ireland’s central bank, Rowland is known for her stringent stance on financial violations as well as involvement in major enforcement investigations. In March, the central bank fined Ireland’s largest stock broker, Davy, for breaching market rules, eventually pushing the firm to put itself up for sale.
Aside from pointing the finger at crypto, Rowland also reportedly outlined the problem of “gamification” of stock investing, referring to coordinated trading via social media platforms, including Reddit-driven GameStop short squeeze. The official said that the ESMA and Ireland’s central bank have held discussions on the issue. While there’s not yet a time-line for any new rules, regulations need to be “technology neutral, so that you’re not getting better protections in older paper-based processes then you are in more online processes,” Rowland said.
A number of central bank officials have raised the alarm on crypto investment recently. In early May — prior to a downturn on crypto markets — the Bank of England governor Andrew Bailey warned that cryptocurrencies have no intrinsic value and that people should only buy them if they’re prepared to lose their money. Last week, Bank of Japan governor Haruhiko Kuroda slammed Bitcoin, arguing that most of the trading was speculative.