Last week’s market-wide price crash caused central banks around the world to issue warnings about the risks of investing in crypto assets.
The central bank of Kuwait was no exception, and on Saturday, it issued a press release to warn the general public about volatility in cryptocurrency markets.
The central bank of Kuwait explained that crypto assets aren’t real currencies as they’re commonly called cryptocurrencies. Consistent with the statement, only a lawful state can issue real currency as a logo of sovereignty:
“The real currency is regulated by state authorities like central banks or monetary institutions. it’s considered and accepted as a store of value and legal tender. It is a reliable medium for exchange.”
The statement added that Dogecoin [DOGE] among the foremost prominent cryptocurrencies by market capitalization, Bitcoin [BTC] and Ethereum [ETH]. Dogecoin is understood for its meteoric rise earlier this year following Elon Musk’s repeated mentions of the meme-originated coin on social media. However, Dogecoin took a pointy dive after the tech mogul’s appearance on Saturday Night Live.
The CBK outlined that the new warning might be a part of the bank’s Diraya campaign, which translates to “Be Aware” in Arabic. Managed by the Kuwait Banking Association, Diraya aims to boost financial awareness within the country and encourage social responsibility activities across the Kuwaiti banking sector.
After listing the standard beef regarding crypto, like money laundering, fraud, and unauthorized transactions, the CBK noted the environmental cost of energy-intensive crypto mining operations.
Recently, Musk announced that the electric car maker Tesla would stop accepting Bitcoin as a means of payment due to its potentially harmful effect on the environment. However, consistent with a new study by Mike Novogratz’s Galaxy Digital, traditional banking uses twice more energy than Bitcoin annually.