Following in the footsteps of countries like South Korea and China, who have moved to clamp down on cryptocurrencies, the finance ministers of France and Germany have said that the crypto market poses a substantial risk for investors and could lead to financial instability in the long run.
French Finance Minister Bruno le Maire and his German counterpart Peter Altmaier, in a letter sent to other G20 finance ministers, claim that cryptocurrencies have created implications for global financial security, and that the lack of protections could severely damage investor’s personal financial security.
In the letter, the ministers say:
“Given the fast increase in the capitalization of tokens and the emergence of new financial instruments” based on them, “these developments should be closely monitored,”
The two also called for greater security for investors speculating in the crypto market, saying:
“the buildup of individual exposures to such volatile tokens could have damaging consequences for misinformed investors who do not understand the risks they are exposing themselves to.”
Earlier in the week, European Central Bank member Yves Mersch said that “cryptocurrencies” are “not money, nor will they be for the foreseeable future,” calling them a “combination of a bubble, a Ponzi scheme, and an environmental disaster”, citing the issues related to the high energy consumption used in crypto-mining.
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