Cryptocurrencies are among us and they have come to stay even though there is a significant part of the population that is not at all familiar with them. Investors, on the other hand, have quickly adapted to the situation and several of them have become true experts in the field. However, not all actors are in favor of the use of digital currencies. Let’s review some of the organisms that see them as an enemy.
The CNMV and the Bank of Spain
The National Securities Market Commission (CNMV) and the Bank of Spain are two of the institutions who have most opposed the use of cryptocurrencies. In February 2021 they issued a joint statement warning about its use.
The two entities mentioned at that time the negotiation of the MICA regulation, to establish a regulatory framework for the issuance of crypto assets and service providers, to ensure that from the legal point of view “They are not considered a means of payment, they do not have the backing of a central bank or other public authorities and they are not covered by customer protection mechanisms such as the Deposit Guarantee Fund or the Investor Guarantee Fund”.
They also consider that they are high risk investmentsremembering that there are around 7,000 cryptocurrencies similar to Bitcoin on the market. “These are complex instruments, which may not be suitable for small savers, and whose price entails a high speculative component that can even lead to the total loss of the investment. Additionally, there are leveraged derivative products linked to cryptocurrencies that allow you to invest indirectly in them, which further increases their complexity and the possibility of suffering losses greater than the initial investment, which is why they require great knowledge and experience».
The European Central Bank
The crusade against cryptocurrencies does not come only from Spain. Most central banks have positioned themselves against this product. Without going any further, the ECB, in the mouth of its president, Christine Lagarde, said that all cryptocurrencies, in which it included the stablecoins and speculative assets, “they are not coins at all” and that, therefore “should be regulated and supervised by asset regulators”.
“Stablecoins pretend to be a currency, but in reality they are completely associated with a real currency”maintains the president of the European Central Bank, although it is true that she assumes that “could be used to make certain transactions”, he added.
However, the ECB is not averse to the cryptocurrency world and is already planning to create its own digital currency, according to El Independiente. A few months ago, the organization began the research phase of the project that is based on the landing of a digital euro that will not replace cash, after carrying out an analysis for almost a year and achieving “promising results”.
In addition, the Chinese central bank considers that all cryptocurrencies should be outlawed. “Virtual currency exchanges abroad that use the internet to offer services to national residents are also considered an illegal financial activity”.
The G20 is also not very supportive of the use of this type of currency, since it has recently assured that they could endanger the global financial system. This international organization, which integrates all the large economies of the G20, warned of the speed at which the cryptoactive markets are growing while noting that “they could reach a point where they pose a threat to global financial stability”according to a Business Insider report, which includes Infobae.
The dangers are three: the scale they’re speeding up to and its interconnection with the traditional financial system, the lack of regulation and the weaknesses of the crypto system itself.
“At the moment, crypto assets represent only a small portion of the assets in the global financial system, and direct connections between cryptocurrencies and major financial markets and institutions are limited”highlighted the Financial Stability Board.
In that sense, he indicated that the problem is that these connections do not stop growing. “If the current trajectory of growth in scale and interconnectedness of crypto assets with these institutions were to continue, this could have implications for global financial stability”he added.