The Spanish financial markets watchdog and the country’s central bank criticized — again — cryptocurrencies as an investment asset. The entities issued a joint statement warning about the high risks the cryptocurrency market poses.
Document: Crypto Adoption as a Payment Means ‘Is Still Limited’
Per the paper, the Bank of Spain and the National Securities Market Commission (CNMV) reaffirmed their stance against considering bitcoin (BTC) as a means of payment. After dismissing cryptos as secure investment assets, they also pointed out the lack of regulation in the European Union.
However, they recognized that the European bloc is holding talks on establishing a legal framework to regulate the crypto environment.
The document elaborates on the “liquidity” factor;
Many of these cryptocurrencies can find themselves lacking the necessary liquidity to be able to undo an investment without suffering significant losses, especially since their circulation among investors, both retail and professional, is minimal.
As a means of payment, both CNMV and the Bank of Spain believe that it is “still limited” compared to other digital payment solutions. They added:
It is necessary to remember that there is no obligation to accept bitcoin or any other crypto asset as a means of payment of debts or other obligations. The future MiCA Regulations do not foresee that this will change. Furthermore, given their high volatility, cryptocurrencies do not adequately fulfill the functions of a unit of account and store of value.
An Indirect Warning Towards Spanish Companies That Want to Replicate Tesla’s BTC Move?
In the document, there was a mention of a speculative factor:
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.
The statement got local media outlets like El Español to speculate on its timing. In fact, El Español believes the bodies issued that document as a “forceful alert” in the wake of Tesla’s bitcoin-related announcement. Quoting local experts, the media outlet says the warning is clearly a “wake-up call for institutions and companies.”
Three years ago, the Spanish central bank and Spain’s financial markets regulator published a similar document, where they raised concerns on cryptocurrencies and initial coin offerings (ICOs). However, both entities put particular emphasis across the paper on the lack of regulation in Spain, targeting retail investors.
What do you think about the new document issued by the Bank of Spain and the CNMV on cryptos? Let us know in the comments section below.