The Spanish financial market regulator and the Spanish Central Bank once again criticized cryptocurrencies as investment assets. These entities issued a joint statement warning that the cryptocurrency market poses high risks.
Documents: Using encryption as a payment method means “still restricted”
According to the document, the Bank of Spain and the National Securities Market Commission (CNMV) reiterated their opposition to Bitcoin (BTC) as a means of payment. After treating cryptocurrency as a safe investment asset, they also pointed out the lack of supervision in the European Union.
However, they recognize that the European Group is negotiating to establish a legal framework to regulate the encryption environment.
The document elaborated on the “liquidity” factor;
Many of these cryptocurrencies find themselves lacking the necessary liquidity to be able to withdraw investments without incurring major losses, especially because they have very little circulation between retail and professional investors.
As a payment method, both CNMV and Bank of Spain believe that compared with other digital payment solutions, it is “still limited.” They added:
It is necessary to remember that there is no obligation to accept Bitcoin or any other encrypted asset as a method of payment for debts or other obligations. The future “MiCA Regulations” did not anticipate that this situation would change. In addition, given its high volatility, cryptocurrencies cannot fully satisfy the functions of unit accounts and value storage.
An indirect warning to Spanish companies that want to copy Tesla’s BTC move?
In the document, a speculative factor is mentioned:
These are complex tools and may not be suitable for small savers. Their prices contain high speculative elements and may even lead to total investment losses.
The statement prompted local media such as El Español to speculate on its timing. In fact, the Spaniards believe that after Tesla’s announcement related to Bitcoin, these institutions issued the document as a “strong warning.” The media quoted local experts as saying that the warning was clearly “a wake-up call to institutions and companies.”
Three years ago, the Central Bank of Spain and the Spanish financial market regulator issued a similar document expressing concerns about cryptocurrencies and initial coin offerings (ICOs). However, both companies in this article emphasize the lack of regulation for retail investors in Spain.
What do you think of the new documents on cryptocurrencies issued by Spanish banks and CNMV? Let us know in the comments section below.
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