15 Dec 2017
The head of one of Britain’s leading financial regulators has warned people to be ready to “lose all their money” if they invest in Bitcoin.
Andrew Bailey, head of the Financial Conduct Authority, told the BBC that neither central banks nor the government stood behind the “currency” and therefore it was not a secure investment.
Buying Bitcoin, he said, was similar to gambling – and had the same level of risk.
“It’s not a currency, it’s actually not regulated in its Bitcoin form,” Mr Bailey told me in an interview for Newsnight.
“It’s a very volatile commodity in terms of its pricing.
“If you look at what has happened this year, I would caution people.
“We know relatively little about what informs the price of Bitcoin.
“It’s an odd commodity as well, as the supply is fixed.
“If you want to invest in Bitcoin be prepared to lose your money – that would be my serious warning.”
Mr Bailey said that financial regulators did not oversee “commodities” and that he was not immediately pressing for a change in the rules.
And he denied that regulators were being left behind by the new technology of cryptocurrencies.
“The decision on what we regulate is appropriate for government and Parliament,” he said.
“It would be for Parliament ultimately to make that choice if it wished to do so.
“I don’t press for that providing people understand very clearly this is a very volatile commodity.
“[But] if parliament wants to go further we will happily provide the evidence we have and will support the decision they want to take.”
Bitcoin’s soaring value
The cryptocurrency has grabbed the headlines this year after its value soared.
A year ago one Bitcoin was reported to be worth £580 on CoinDesk, a cryptocurrency news site.
Today it is worth £12,400.
– By Kamal Ahmed, BBC
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