Central Bank of Kuwait Warns Against Investing in Cryptocurrencies

Following last week’s price crash, the Central Bank of Kuwait issued a statement to warn the public about volatility in cryptocurrency markets. 

May 24, 2021, | AtoZ Markets Cryptocurrency transactions involve high risk and have a number of negative consequences for dealers. This is stated in a statement by the Central Bank of Kuwait (CBK).

The regulator pointed to the volatility of digital assets and the fact that they are not subject to government oversight. In his opinion, this increases the risks of money loss and fraud.

“They [cryptocurrencies] pose a threat to the global financial system and human well-being. […] Transactions with cryptoassets offered by unidentified issuers leave a wide scope for illegal use of funds, ”added CBK.

According to the press release, despite the name, cryptocurrencies are not real money. The central bank stressed that only the state has the legal right to issue real currency.

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Real currency is regulated by government agencies. It is accepted as a store of value and legal tender and serves as a reliable instrument of exchange,” the message says.

CBK concluded by mentioning the high energy consumption of miners, which "adds an environmental dimension to the threat."

Read also: New York Attorney General Says Cryptocurrency Investment is Risky

Earlier, the UK watchdog, the FCA, issued a warning to young investors who engage in high-risk financial investments like cryptocurrencies.

Recall too that the Polish regulator, the KNF has joined foreign counterparts and warned crypto investors about the risks of trading cryptocurrencies. In their opinion, brokers offer clients sophisticated cryptocurrency products, but they do not provide them with adequate protection.

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