Cryptocurrency Ill-Suited to Small InvestorsBy Steven Anderson July 4, 2019 Off
Consumers who do not likely understand the risk or value-related to Bitcoin can suffer huge losses. Cryptocurrency is ill-suited to small investors.
The Financial Conduct Authority (FCA) stated that derivatives and exchange-traded notes (ETNs), “suffer harm from sudden and unexpected losses if they invest in these products.”
There is a lot of difficulty in evaluating them due to their extreme volatility, and consumers do not have a clear understanding of what they are buying in to.
Christopher Woolard stated, “As with our work on the wider CFD and binary options markets, we will act when we see poor products being sold to retail consumers. These are complex contracts built on top of complex assets.”
A group of Democrats in their letter to Facebook Inc. stated: “If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger the U.S. and global financial stability.”
The letter further stated that the scant information concerning the potential use of Libra and Calibra and the lack of regulatory protections for the currency, to have eventually exposed the enormous risks associated with cryptocurrency.
The letter elaborated on how the vulnerabilities can probably be exploited by bad actors concerning cryptocurrencies, wallets, and exchanges.
The government is yet to identify legislative solutions, and therefore they have requested Facebook to hold off on implementing their Libra plans until the Congress, and the regulators have had the time to hold public hearings to examine the risks and benefits.
They stated thus: “Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”
Cuba has recently announced its intention to consider using cryptocurrency to bolster on their finances. Just like Venezuela, Cuba is suffering from more robust forms of U.S. led sanctions, and the country is suffering from a political and financial crisis of its own.
Miguel Diaz-Canel, the president of Cuba, stated that the cryptocurrency plan is focused on improving national production and demand in a way to improve on the growth of the country’s economy. It is noted that the current cryptocurrency plan will boost pensions and wagers for the employees in public administration, state-run media, and social services, eventually doubling their average monthly wages.
Of note, Donald Trump, the U.S. president, included the Venezuelan cryptocurrency to the list of their assets. Even those companies who are assisting in avoiding the sanctions might get into hot water. Of note, a Russian Bank has been subject to penalties to have financed for the petro.
About The Author
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche.