Gabriel Makhlouf, Governor of the Central Bank of Ireland and a member of the ECB's governing council, said investors risk losing all of their investment capital as Bitcoin and other cryptocurrencies go to zero.
High-risk cryptocurrencies
Gabriel Makhlouf, a member of the board of directors of the European Central Bank, said at a conference held last weekend that cryptocurrency investors would likely be doomed to lose all of their invested capital, as cryptocurrencies will fall to zero, according to a report on Bloomberg (here quotation in real time).
He argues that his comments are to be contextualized in the wake of recent claims by the British government about Bitcoin and other cryptocurrencies. reiterating the concepts expressed by the UK government a few weeks ago, Makhlouf is of the opinion that those who invest in bitcoin must accept the risk of "losing all their money - this is certainly my opinion," he said in the interview.
He added that while he cannot fully understand the reasons why people invest in this type of asset, he clearly sees how these are perceived as assets and also as investments, and, according to him, the crypto sector is based on this. belief. Makhlouf has been Governor of the Central Bank of Ireland since 2019.
Previously, he was Secretary of the New Zealand Treasury and worked on macroeconomic structures, monetary policies and economic prospects. But he's not optimistic about the Bitcoin space.
On Friday, Makhlouf said central bank administrators should be required to closely monitor developments in the cryptocurrency space, especially "in their regulatory role". The government doesn't recognize the role of cryptocurrencies, but as people do, and as billions of dollars are in circulation within the industry, cryptocurrencies continue to exist and develop.
New cryptocurrency laws from the UK
The UK government made similar comments earlier last month while urging feedback to outline a proposal for businesses and investors participating in the booming crypto industry.
The government's stance said cryptocurrencies remain an experiment but several aspects, such as stablecoins and decentralized finance apps, were proving to be an interesting development.
Despite the few positives, the UK government said Bitcoin and other cryptocurrencies are "high-risk speculative investments" and should be treated as such, adding that consumers investing in space should be "ready to lose all their money".
That said, however, the UK is on track to introduce investor protection laws and regulations for cryptocurrency exchanges and wallet services. This is in the form of a "crypto license" that every company in the crypto sector should mandatorily hold, otherwise they would risk losing their business.
