The Spanish financial market watchdog and the country’s central bank once again criticized cryptocurrencies as fixed assets. The companies issued a joint statement warning them of the high risks of the cryptocurrency market.
Document: Crypto adoption as a means of payment means “is still limited”
According to the paper, the Bank of Spain and the National Securities Market Commission (CNMV) have reiterated their stance on considering Bitcoin (BTC) as a means of payment. After dismissing cryptos as a safe investment, they also pointed out the lack of regulation in the European Union.
However, they acknowledged that the European bloc is in talks about creating a legal framework to regulate the crypto environment.
The document deals with the liquidity factor.
Many of these cryptocurrencies may lack the liquidity necessary to roll back an investment without incurring significant losses, especially as their circulation among retail and professional investors is minimal.
As a means of payment, both CNMV and Bank of Spain believe that it is “still limited” compared to other digital payment solutions. They added:
It should be noted that there is no obligation to accept Bitcoin or other crypto assets as a means of payment for debts or other obligations. The future MiCA regulations do not provide for any change. In addition, due to their high volatility, cryptocurrencies do not adequately fulfill the functions of a unit of account and a store of value.
An indirect warning to Spanish companies looking to repeat Tesla’s BTC move?
One speculative factor was mentioned in the document:
These are complex instruments that may not be suitable for small savers and whose price includes a high speculative component that can even lead to the total loss of the investment.
The statement got local media outlets like El Español to speculate on the timing. In fact, El Español believes the authorities issued this document as a “strong warning” following Tesla’s announcement regarding Bitcoin. Quoting local experts, the media say the warning is clearly a “wake-up call for institutions and companies”.
Three years ago, the Spanish Central Bank and the Spanish Financial Market Authority released a similar document in which they raised concerns about cryptocurrencies and coin offerings (ICOs). Both companies, however, place particular emphasis on the lack of regulation in Spain throughout the paper and are aimed at private investors.
What do you think of the new document from the Bank of Spain and the CNMV on cryptos? Let us know in the comments below.
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