The central bank of Spain issued a reminder to the citizens, warning of the risks which were involved in transacting unregulated cryptocurrencies. The note of the Bank of Spain, which was released on the 10th of February, followed an official blog post, which was published two days before, which outlined the stance of the institution on cryptocurrencies and their characteristics, as well as their legal status in Spain, and even the wider European Union or EU.
Spain still not passed legislation regarding cryptocurrencies
The two documents underscore the fact that the country has yet not passed any legislation regarding crypto, and that the crypto exchange platforms, as well as other companies in the sector, are neither supervised nor authorized by the central bank.
Cryptocurrency platforms don’t carry the protections of the national deposit guarantee systems like the Deposit Guarantee Fund of Spain, according to the statements of the bank.
The bank also warned that cases in which cryptocurrency is utilized for purchases of good and services, it is going to be a mission impossible for a consumer to claim his or her rights when anything goes awry with the payment or purchased product.
Pablo Hernández de Cos: cryptocurrency cannot replace the money
Claiming that there is no state which conferred the status of legal tender on the new asset class, the central bank also recalls that the governor, named Pablo Hernández de Cos, has categorically determined that crypto can’t replace money and that it is not a means of payment or common exchange as well.
The governor also went far as to dismiss the term cryptocurrency itself as being too equivocal, proposing that it has to be replaced by the term virtual currency or crypto asset.
The Central Bank of Spain continued noting the evolving, but still not unanimous, the definition of cryptocurrency in the European Union. The bank cited a 2015 Directive which deems cryptocurrency to be a digital representation of value, without public authority issuance, or central bank, and which doesn’t have the status of legal tender. The Directive even noted that crypto can nonetheless be exchanged, as well as transacted between natural people or legal entities.
Market regulators uphold a cautious stance
While conceding the notable growth from recently of the cryptocurrency sector, both of the documents underscore the purported high volatility, cybersecurity risks, as well as weak consumer rights connected with the industry.
As it has been reported in December of last year, the ruling party of Spain, the Partido Popular or PP, has announced it has been working to introduce a draft bill on crypto, as well as blockchain regulation. The move has the intention to provide some degree of certainty for the investors and even indicated that the party considers the introduction of tax cuts, to encourage domestic blockchain innovation.
The market regulators of the country nonetheless continue upholding a cautious stance with the National Securities Market Commission, adding about 23 unauthorized forexes, as well as entities related to crypto to its warning list from January.