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Spain and South Africa highlighted Bitcoin risks despite massive institutional support

The central banks of Spain and South Africa have issued communications in recent days in which they insist on alerting their citizens about the risks of investing in bitcoin (BTC), despite the institutional support and the growing adoption it has received the precious cryptocurrency.

The Bank of Spain (BDE) through a statement warned, on January 28, Spanish citizens that bitcoin and the rest of cryptocurrencies «do not have the backing of a central bank or other public authorities, even if they are presented as an alternative to money. “

In this sense, they argued that digital assets have” liquidity problems and extreme volatility. ” In addition, they assured that price changes are not “always transparent”, so they lend themselves to being “manipulated”.

They also point out that cryptocurrencies have a speculative nature. They add that those people who have acquired bitcoin and other digital assets could have difficulties to sell them , in addition that, according to they say, they do not have the guarantees that “banking or investment products” can offer.

It is not the first time that the Bank of Spain has issued warnings of the same type. In 2018 he undertook the task of making the same remarks about cryptocurrencies.

In the case of the Authority of South African Financial Sector Conduct (FSC), published a document on February 4, in which they note having received a large number of complaints from South African investors who “have lost their savings when making investments related to cryptocurrencies. ”

Similarly, some users reported having been“ scammed ”with investments in digital assets that“ promised a high level of returns. ”

The alert of the FSCA has similarities with that of the Spanish bank , saying that crypto assets are not issued by a central bank and related investments are not regulated by the body. “If something goes wrong, it is unlikely that you will get your money back,” they assert.

They also reported that the FSCA They are working on creating a regulatory framework for investments in digital assets that will help to better understand and regulate cryptocurrencies in the coming months.

Corporate appetite for bitcoin

As reported last December by CriptoNoticias, companies from the United States, Canada, Australia, Switzerland and Germany, for example, have already invested USD 20 billion in the first cryptocurrency.

According to the information service Bitcoin Treasuries, some 28 publicly traded companies, private companies and mixed funds hold millionaire positions in BTC as a safeguard in their treasuries. Leading in this category is Grayscale Bitcoin Trust with 649,130 ​​BTC saved, followed by the questioned Mt.Gox service with 141,686 BTC and Block.One (EOS) with another 140,000 BTC.

Grayscale leads the way as the publicly traded company with the largest amount of bitcoin in its custody. Source: bitcointreasuries.org

Spain, bitcoin and central bank digital currencies

Although it is true that the monetary authority of Spain continues with calls to maintain caution with bitcoin , due to its volatility and risks, has also been open to a debate regarding cryptocurrencies, but especially with central bank digital currencies (CBDC, for its acronym in English).

In July 2020, the BDE joined the existing debate around central bank digital currencies, to review the reasons that justify their issuance and carry out a preliminary analysis of the main implications that issuance of this type could have for central banks of currencies.

In fact, they recognized the role that bitcoin and other cryptocurrencies, as well as anchored cryptocurrencies or stablecoins have had in accelerating the investigations on the CDBC, as reported by CriptoNoticias.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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