Denmark’s central bank governor Lars Rohde has zero tolerance for Bitcoin and its investors; the unregulated cryptocurrency, according to him, is nothing more than a dangerous risk, and its investors must educate themselves on the possible dangers, instead of relying on financial regulators.
“You should stay away [from Bitcoin]. It is deadly,” said Rohde while speaking to state broadcaster DR. “It is not a regulated market. It is not the responsibility of the authorities. It is the responsibility of the individual.”
Rohde went on to warn investors not to “come and complain to us if it goes wrong”.
Bitcoin has seen an increase of more than 1,800% in price since the start of the year and the cryptocurrency is still going strong, having recently broken the $20,000 barrier. However, its ever-rising price has unnerved many, because the driving factors behind the price rise remain unclear, and predicting its wild fluctuations is next to impossible.
Commenting on Bitcoin’s unpredictable price movement and continued rise, Rohde stated that he viewed Bitcoin “as tulip mania, which is a bubble that is out of control”.
Bitcoin’s soaring popularity has enabled it to start establishing a foothold in the mainstream; however, despite the burgeoning presence of multiple hedge funds centered around cryptocurrencies, integration by popular payment apps such as Square, and most importantly the recent launch of Bitcoin futures products by reputable exchanges such as CME and CBOE (with Nasdaq and Cantor Fitzgerald to follow suit in 2018), world governments, banks, and regulators remain wary of the cryptocurrency, calling it a bubble that is due to burst. In addition, lack of regulation has led to added concern about the possibly criminal uses to which the cryptocurrency might be put.
European Union states recently reached consensus on new rules for the regulation of cryptocurrencies, in order to increase transparency and reduce/detect its possible usage in illicit activities such as money laundering and terrorism financing. In addition, the finance minister of France recently proposed that a serious discussion on Bitcoin regulation needs to be undertaken at the upcoming G20 summit in April 2018.
While some governments and banks have started to look into the possibility of a central bank-issued digital currency to counter the alleged threats posed by privately-held cryptocurrencies, Denmark’s central bank remains unconvinced of the usefulness of the idea; last week, the bank observed that a digital version of the Danish krone would do little to improve payment solutions, and might even end up causing financial instability.