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In the past, the Irish Central Bank has been critical of crypto and digital assets. Ireland’s Central Bank governor, Gabriel Makhlouf, has now urged lawmakers to ban crypto advertisements.
According to the Ireland Central Bank, cryptocurrency advertisements are directed towards young adults, which could prove harmful as crypto can be equivalent to “Ponzi schemes.”
Makhlouf also has reasons to believe that the assets lack underlying value. The primary concern for Ireland’s Central Bank is that crypto has low financial stability, which poses a risk to the economy. There could be an unfavorable impact on retail customers because of that.
Gabriel Makhlouf stated before the Irish parliamentary committee:
There’s a reasonable number of young adults who have put their money into crypto and there is an uncomfortable level of advertising that is targeted at that cohort. If you could find a way, I would recommend that adverts to that cohort are banned.
Ireland’s Central Bank’s criticism revolves around the idea that only a few tokens are backed by other assets, which is why the other digital assets can be as bad as “Ponzi schemes.” Makhlouf also claimed that buying this asset can be equated to “gambling,” as most of these investments lead to “waste and loss of money.”
Ireland Banking On European Union To Regulate Crypto
Being a part of the European Central Bank’s governing council, Makhlouf has mentioned that when EU regulations come into place, it will help with Ireland’s digital asset regulatory aspect. These regulations will be the much-needed “guardrails” for stablecoins.
Stablecoins are a form of crypto that hold steady value as they are backed by fiat currency. The EU’s regulations will be a start somewhere. Still, digital assets will require much more than that, as the government official believes that the stablecoin legislation alone will not resolve this problem.
Makhlouf was indirectly referring to the Markets in crypto-asset (MiCA) rules, which primarily contain guidelines for stablecoin issuers.
Ireland has previously issued warnings to retail customers but has shown businesses in this space leniency. Gemini and Binance are the two major crypto exchanges that have gotten approval to operate in Ireland.
Other Countries Have Also Called Digital Assets Ponzi Schemes
Currently, there are over 20,000 cryptocurrencies in circulation, even though governments of various nations have banned them. Most governments have felt that crypto are “Ponzi schemes” that can be compared to gambling.
Countries have been worried about the destabilization of their economies due to the nature of the asset. For instance, India’s Central Bank has also called digital assets “Ponzi Schemes.”
Other nations, such as Indonesia, consider private digital assets to be the same and have banned the digital assets. Furthermore, Bangladesh, North Macedonia (the only European country), Qatar, and Bolivia have banned the assets, over the same concerns.
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