Cryptocurrencies are likely to face tougher regulation after the bitcoin boom, Sweden’s central bank chief says

Cryptocurrencies such as bitcoin are likely to become regulated as a result of their booming popularity and use in crime, the governor of Sweden’s central bank has said.

“When something gets big enough, things like consumer interests and money laundering come into play,” Stefan Ingves said on Monday.

He added: “So there’s good reason to believe that [regulation] will happen,” Bloomberg reported.

In a speech to the Swedish economics association, he raised concerns about bitcoin in particular. He said it “is very ineffective to use, as each payment requires large amounts of time and energy.”

He added central banks must “adapt our activities to the new environment.”

Ingves is the latest in a long list of central bankers or financial policymakers to either criticize cryptocurrencies or raise the prospect of tougher regulation.

Currently, the crypto market around the world is virtually unregulated, with only a few companies providing access to regulated investments that give exposure to cryptocurrencies.

When investors buy bitcoin or other cryptocurrencies online, they by and large do so at their own risk and have no protection against scammers.

But central bankers – the key regulators of global financial systems – are increasingly concerned that investors could get badly burned as a result of the cryptocurrency boom.

Bank of England chief Andrew Bailey has said people should only buy bitcoin if they’re prepared to lose all their money, and European Central Bank boss Christine Lagarde has suggested tougher global regulations.

In the US, new Securities and Exchange Commission boss Gary Gensler said at the end of May that “there are many challenges and gaps for investor protection in [cryptocurrency] markets.”

He told US lawmakers: “I look forward to working with fellow regulators and with Congress to fill in the gaps of investor protection in these crypto markets.”

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