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The Bank of Spain warns against the use of unregulated crypto currencies in Spain

Margarita Delgado, deputy governor of the Bank of Spain, expressed her views on cryptocurrencies and how they are raising hazards in today’s economy. Delgado said at a PWC-hosted event titled “A climate of change” that the ongoing and extended use of cryptocurrencies could pose a variety of threats to the 12% of the population that now owns cryptocurrency.

The Deputy Governor of Spain’s Central Bank Examines Cryptocurrency Risks

Margarita Delgado, deputy governor of the Bank of Spain, has expressed her views on the use of cryptocurrencies and their potential impact on the country’s economy. The claims were made during a lecture delivered at a PWC-hosted event dubbed “a climate of change,” which focused on the changing nature of the financial industry.

The deputy governor added that widespread adoption of cryptocurrencies introduces a number of vulnerabilities to the system, including a general lack of information among those who utilize these assets. Among the other hazards is the ambiguity associated with decentralized finance, which can result in over-leveraging and payment difficulties. Delgado elaborated on the potential effects of the crypto segment on other markets:

Its high volatility can have a contagious effect on other markets, due to the panic and overreaction that can be transferred to other trading environments.

Additional Cautionary Statements and Estimates

Delgado also alluded to the potential impact of investing in and storing cryptocurrency assets on traditional banking, owing to the emergence of a mixed sector that offers both services to its customers. She noted that the assets would result in a “significant increase in patrimonial and reputational risks.”

The Bank of Spain has already highlighted concerns about regular banks offering consumers cryptocurrency-based services. The governor of the Bank of Spain discussed the implications of this association during his February speech at the II Finance Observatory, warning that exposure to cryptocurrency assets would introduce new risks for the banking system.

Finally, Delgado thinks that 13% of Spanish residents own some form of cryptocurrency, implying that this type of discourse is necessary for them to gain a full understanding of the subject of crypto. She concluded as follows:

It would be necessary to check whether these investors are fully aware of the risks to which they are exposed or have simply been pushed by expectations of extremely high revaluations.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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