The Governor of the Central Bank of Ireland, Gabriel Makhlouf, wants to better regulate the cryptocurrency sector and thus welcomed the arrival of MiCA regulations in 2025. He also highlighted the difference between stablecoins and other cryptos – including the Bitcoin (BTC) and Ether (ETH), which according to him, constitute lottery tickets or even Ponzi pyramids.
Cryptocurrencies in the sights of Ireland
Gabriel Makhlouf, Governor of the Central Bank of Irelandreleased a statement aimed at expanding on its approach to the cryptocurrency industry and determining how it could be framed to better protect investors.
Based on the “crypto winter” of 2022, littered with events that are extremely difficult to digest for the ecosystem, but also for its image (particularly FTX and Terra), the governor highlighted the risks associated with this marketmentioning “ lack of consumer protection, aggressive and misleading advertising, risk of contagion, inappropriate use of client assets and insufficient quality of certain cryptocurrency reserves “.
According to Gabriel Makhlouf, the Irish population is only relatively exposed to cryptocurrencies, but the resulting risks would be sufficient to encourage stricter supervision on a global scale. As such, he welcomed the arrival of the MiCA regulation, whose implementation on the market is expected for 2025. It will also be the first regulation concerning cryptocurrencies thought out on such a large scale.
Drawing a parallel with the “classic” financial market, the Governor of the Central Bank of Ireland said that due to its great growth, the cryptocurrency market must also be structured in a way that safeguards crypto platform client funds.
👉 To understand everything – MiCA and MiFID 2: what are the differences between these two European regulations?
Buy crypto on eToro in minutes
According to the press release, the Central Bank of Ireland would not be closed to technological innovation, and would even attach “great importance” to it. As such, the governor called decentralized finance (DeFi) tools such as blockchain and smart contracts a “step forward”in particular insofar as the latter made it possible to facilitate access to financing for small and medium-sized enterprises.
Gabriel Makhlouf also insisted on underlining the difference between ” backed cryptocurrencies ” And ” unbacked cryptocurrencies », where backed means “stablecoin backed by at least an equivalent reserve in fiat currency”. According to him, the latter are safer when “ appropriate checks are put in place to ensure the reserves in question.
And conversely, “unsecured” cryptocurrencies, i.e. those that are not stablecoins (including Bitcoin (BTC) and Ether (ETH)), are they called a “lottery ticket” and a “Ponzi scheme” because of their volatility :
“Buying such products can be like buying a lottery ticket: you may win, but you probably won’t. And calling them an “investment” is, of course, a misnomer; “Ponzi scheme” would be fairer. The Central Bank remains concerned about the risk of harm to consumers and, in particular, discourages the marketing of cryptocurrencies to the public. »
Governor’s statements directly echo the concerns expressed by the various central banks around the worldin particular by the European Central Bank, the Bank of England or even by the Federal Reserve of the United States (Fed).
👉 To read – TRIBUNE – Web3: do not penalize the growth of our companies or the attractiveness of France
Alyra, training to integrate the blockchain ecosystem
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.