The Central Bank of Cyprus has urged the public to exercise caution before investing in crypto-assets, citing risks of significant financial losses and fraud. It noted that the European Union’s Regulation on Markets in Crypto-assets aims to improve transparency and provide a stronger framework for crypto-asset activities, but does not eliminate all associated risks. The central bank highlighted persistent concerns including excessive volatility, highly speculative trading, fraud, and limited trust stemming from insufficient regulatory frameworks and infrastructure. It also stressed that crypto-asset-related activities continue to be treated as high risk under specific rules such as Anti-Money Laundering and Terrorist Financing Regulations, and concluded that crypto-assets are unsuitable as foreign reserve assets because they should have fundamental value, sufficient liquidity, and safe-asset characteristics. The release also stated that no Cypriot bank invests directly or indirectly in crypto-assets.
Central Bank of Cyprus 2025-02-07
Central Bank of Cyprus warns consumers on crypto-asset risks and says they are unsuitable as foreign reserve assets
The Central Bank of Cyprus has cautioned the public about investing in crypto-assets due to risks like financial losses and fraud. It emphasized that while the EU's Regulation on Markets in Crypto-assets enhances transparency, it does not eliminate all risks, including volatility and speculative trading. The bank reiterated that crypto-assets are unsuitable as foreign reserve assets and confirmed no Cypriot bank invests in them.