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The number of people increasingly interested in cryptocurrencies appears to be constantly growing globally. But unfortunately, we also know that the consequences of this situation include an increase in criminal activity linked to the sector.
For this reason, the growing interest of financial regulators around the world comes as no surprise. Today we will address the recent news from Ireland, placing the country in a broader international context.
The ASAI and the crypto marketing
We define digital advertising as “crypto marketing” to promote cryptocurrency trading. Excluding stablecoins, cryptocurrencies are notoriously volatile assets with significant investment risk.
This appears to be the reason for the Advertising Standards Authority of Ireland (ASAI) to view the industry with concern. In a recent statement, an ASAI member provided some details.
The authority received several suspicious reports on the meme coin niche going through the ASAI’s claims. The institute fears that people will see crypto trading as a game rather than an investment.
A consequence of this statement concerns the methodology of approach to cryptocurrencies. People may disregard fundamental money management rules in gamified finance, recording financial losses.
ASAI looks very carefully at the evolution of the market situation in the United Kingdom. In the following paragraph, we report more details on the matter.
Looking at the UK
The Advertising Standards Authority (ASA) is the British counterpart of the ASAI. The primary battle of the ASA against crypto marketing is that of the promise of easy earnings.
As noted by the authority, several investment portals in the sector operate activities deemed “misleading”. For example, websites mention the excellent performance of many cryptocurrencies in the past as motivation to invest in the market.
For this reason, trading portals indicate that past performance is not an indicator of future earnings. Unfortunately, while this notion is apparent to those familiar with the markets, many new crypto traders may fall for the trap.
The interventions of the ASA in the cryptocurrency market are increasingly frequent. Among the most recent cases, we can mention the ban on two crypto ads in the country.
The position of central bankers
The Irish Central Bank does not consider cryptocurrencies as financial assets as other countries. However, to date, their regulation remains on a par with that of foreign currencies.
The institute has reported deep concerns about the cryptocurrency sector. The bank governor’s position is that cryptocurrencies “have no intrinsic value”.
It is important to remember that Ireland is part of the Eurozone and, therefore, it is the ECB that governs its monetary system. The position of Christine Lagarde, Head of ECB, is clear: “cryptos are not currencies”.
If we see cryptocurrencies as assets and not as currencies, the regulatory scenario changes radically. From taxation to investor protection, so many aspects could change for cryptocurrencies in the future.
Final thoughts on the increasing worries of financial authorities
The world of digital payments is now a daily reality for many of us, and cryptocurrencies are part of it. Furthermore, the lifestyle habits of families are changing and, naturally, a new channel like crypto attracts curiosity.
Faced with ever-higher market capitalizations, traditional finance is wondering how to move in the future. Central banks may see their position as the primary market regulators in jeopardy.
The voice of ASAI joins a chorus already full of other players in the market. The hope is that the new interventions by regulators will create more protection for small investors.