Central Bank of Ireland: ‘Highly Unlikely’ Retail Crypto Trading to be Allowed
The Central Bank of Ireland has released a February report on “Security Markets Risk Outlook,” in which it highlights key areas of risk for regulated financial service providers.
Down on page 23 is a section on new products of which crypto assets get a mention. Echoing the sentiment of most central banks, the report stated that cryptocurrencies are “likely to be highly risky and speculative.”
The bank added that consumers must be alert to the high risks of buying and/or holding these instruments, “including the possibility of losing all their investment,” because the majority are unregulated in the European Union.
Increased Interest in Crypto
The Bank of Ireland did state that it has seen an increase in queries for Undertakings for Collective Investment in Transferable Securities (UCITS) or retail Alternative Investment Funds (AIF) in crypto assets. However, it was not likely to approve anything for retail investors any time soon.
“At the moment, while such assets may be suitable for wholesale or professional investors, the Central Bank is highly unlikely to approve a UCITS or a Retail Investor AIF proposing any exposure (either direct or indirect) to crypto-assets.”
The central bank did not rule out all crypto products, which suggests it may allow exchange-traded products for institutional investors; however, it does want to keep it away from retail.
Industry analyst Colin Wu pointed out that some of the industry’s major players, such as Binance, have set up shop in Ireland.
The Central Bank of Ireland said that it is “highly unlikely” that retail investors will be allowed to crypto assets. Binance has registered multiple companies in Ireland before and there are even rumors of preparing to build a headquarters there. https://t.co/2kyqCkNpnJ
— Wu Blockchain (@WuBlockchain) February 8, 2022
In November, CryptoPotato revealed that Binance was reportedly setting up a global headquarters in Ireland. In August, further rumors emerged that PayPal was setting up a cryptocurrency team on the Emerald Isle.
If the Bank of Ireland cracks down on crypto trading for retail, Binance and its brethren may need to look elsewhere for their bases of operations.
Loathing Digital Assets
Central banks loathe crypto because they cannot control it. Their job is primarily to control monetary policy and the economy, which has an impact on the population, be it negative or positive, the central bank is the boss.
Crypto challenges that by design as it puts the monetary control back into the hands of the people, not the bankers or politicians who certainly do not want to facilitate Joe public getting their hands on it.
In recent weeks, the central banks of Russia, Pakistan, and Thailand have criticized crypto, with some proposing a complete ban.
Featured Image Courtesy of FT
OhNoRipple via https://www.ohnocrypto.com/ @Martin Young, @Khareem Sudlow
