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Irish Central Bank Governor Gabriel Makhlouf Calls for End of Crypto Ads

The Irish Central Bank Crief believes that investing in "unbacked" crypto currencies is "basically gambling," and he believes that crypto advertising frequently leads to Ponzi schemes.

Image Credit: FT (1.1)

The Central Bank of Ireland Governor is recognized for his skepticism toward crypto currency and has advocated for the advertising of crypto currency to be banned.

The Irish Central Bank Crief believes that investing in "unbacked" crypto currencies is "basically gambling," he believes that crypto advertising frequently leads to Ponzi schemes. And the majority of the time, the targets are young individuals.

According to Gabriel Makhlouf's statement:

"Unbacked cryptocurrencies are, in essence, Ponzi schemes... People invest their money in unbacked cryptocurrencies. This makes up for the vast majority of the large stock of cryptocurrencies now available, which are simply gambling with their money. When you bet, there is a chance that you may win, but in most cases, you lose.

He continued by saying:

An unpleasant amount of advertising is directed toward young individuals, and many young adults have invested their money in crypto currency. If there is any way to prevent advertisements from being shown to such individuals, I strongly urge doing so.

Makhlouf believes that crypto currencies only pose a modest threat to the world's financial stability, but they highly impact retail customers. There should be a prohibition on advertising cryptocurrency because fiat currencies or other assets do not support most cryptocurrencies.

Notably, Makhlouf believes that the pending law in the EU pertaining to stablecoins that are backed by fiat currencies would not fix the problem.

That's not the first time that the Irish Central Bank has issued a caution regarding advertisements relating to cryptocurrencies that might be deceptive. The organization issued a warning in March 2022 that stressed the dangerous and speculative character of digital currencies, implying that they may not be fit for retail clients to invest in.

Details of the MiCA Legislations

Recently, the European Union (EU) announced legislation known as MiCA (Markets in Crypto Assets), which would establish standardized standards for crypto-assets at the level of the EU. This would provide legal clarity for crypto-assets not governed by existing EU legislation.

The policy encourages innovation and the usage of crypto-assets by increasing both the protection of investors and clients and the stability of the financial system as a whole.

In the beginning, the law surrounding the MiCA was approved by the parliamentary committee of the European Union in October 2020. This occurred almost two years after the legislation was first presented in September 2020. Votes on the matter were scheduled to take place among EU members in November.

However, it has been decided to hold the vote in February 2023. Due to a technical difficulty, the European Union (EU) has just stated that the final vote on MiCA would be postponed until April of this year.

In particular, the intergovernmental organization representing all 27 member states decided to postpone the crucial vote on the widely anticipated crypto rulebook.

In to comply with EU requirements that demand publishing in all 24 of the Union's official languages, the governing legal document, which is 400 pages long, was not able to be translated into all of the main languages of the Union, which is required.