The cryptocurrency market has faced gains of thousands of percent in the last few years, which in some periods results in great losses due to unexpected regulations or even market manipulations. Now, the Reserve Bank of Australia warns investors about existing risks that could erase all of the gains.
Cryptocurrency market risks
According to an official at the Reserve Bank of Australia, significant gains that investors experienced on the cryptocurrency market could become nonexistent by rapidly changing trends around the industry.
RBA's head of payment policy, Tony Richards, stated that energy usage concerns and association with illegal activities create the most risks for cryptocurrency market investors.
As always, numerous central bank and financial commission officials referred to the industry as energy insufficient, creating more risks for the environment and remaining a popular tool in the hands of criminals.
Stablecoins matter
Richards also touched on the stablecoin industry, which is currently on the path of replacing physical currencies like the U.S. dollar. RVA officials stated that central bank digital currencies could find their place as the niche use case.
The Reserve Bank of Australia acknowledges the importance of new innovation in the payment field, in addition to the importance of implementing digital technologies in traditional banking and fund management. The bank will be looking forward to following all the reforms in the financial industry.
Besides the strong growth, the cryptocurrency industry and the market in general remain too volatile to be fully implemented by traditional financial institutions. Various industry experts believe that the volatility "issue" will solve itself with the further development of the industry.
Alex Dovbnya
