As the digital currency industry begins its recovery from the Christmas-time slump, bearish news emerges from Poland, suggesting that the central bank and top financial regulator are backing an online campaign designed to deter citizens from investing in cryptocurrencies.
A website, the domain name of which translates to “watch out for cryptocurrencies”, is acting as a dedicated portal for issuing warnings about cryptocurrencies. Divided into several sections, the website emphasizes that cryptocurrencies operate within a legal grey area:
“Cryptocurrencies, virtual currencies, digital currencies are not ‘electronic money’ within the meaning of the law.”
It then goes on to expound on the exact nature of digital currencies:
“It [cryptocurrency] is a digital representation of a contractual value among its users, which is not issued and guaranteed by any central bank in the world (e.g. Polish zloty is issued by the National Bank of Poland). Virtual currency is used as an imitation of money if the two sides of the transaction agree with each other. However, it is not a currency (such as the zloty).”
In addition to providing information on the nature of cryptocurrencies, the website outlines 5 key risks investors should take into account before putting their money into crypto. These include the risks of losing money due to theft, the lack of guarantees, the lack of universal acceptability, the possibility of fraud, and high price volatility.
The contact details provided on the website list the Narodowy Bank Polski (or National Bank of Poland) and the Polish Financial Supervision Authority KNF (which also carries a warning against investing in cryptocurrencies on its official website).
As the popularity of the crypto market skyrockets, Poland’s central bank is one among many issuing warnings against cryptocurrencies. The Monetary Authority of Singapore (MAS) has urged citizens to “act with extreme caution” and “understand the significant risks” of investing in cryptocurrencies, as they are not legal tender, unregulated, and driven by speculation.
South Korea’s Financial Supervisory Service (FSS) has also emphasized that cryptocurrencies are not legitimate currencies, and therefore not subject to regulation at present.
Recent reports also suggest that Australian banks are freezing customer accounts and blocking transfers to crypto exchanges.