The Central Bank of Ireland has stated that it is not likely to allow retail investment funds to get either direct or indirect exposure to cryptocurrencies. The bank cites the risks in the crypto market as its reason for the stance.
However, the bank considers crypto suitable for wholesale or professional investors who can properly weigh the risk of the crypto market themselves.
Ireland has long been receptive to the crypto industry and is one of the countries in which the world’s biggest crypto exchange, Binance, plans to set up a headquarters.
Crypto exposure is not yet suitable for retail investors, says Ireland’s Central Bank
The statement on the retail status of crypto was made in the second annual Securities Markets Risk Outlook Report of the Central Bank of Ireland.
In the report, the bank noted that it has been getting a ton of queries as to whether Undertakings for Collective Investment in Transferable Securities (UCITS) or authorized investment funds (AIFs) – investment vehicles that are marketed to retail investors – can get exposure to crypto-assets.
The bank states that at this time the risks inherent in the crypto market would not allow such funds to gain direct or indirect exposure to crypto.
“At the moment, while such assets may be suitable for wholesale or professional investors, the Central Bank is highly unlikely to approve a UCITS or a Retail Investor AIF proposing any exposure (either direct or indirect) to crypto-assets,” the report said.
The reasons outlined for the stance include the “specific risks attached to crypto-assets” and “the possibility that appropriate risk assessment” could be hard for people who are not professional investors to undertake.
Ireland is still open to giving clarity to the crypto industry
Ireland has been one of the countries that have been more accepting of crypto in their policies. In the report, the bank stated that the major limitation of the industry remains that cryptocurrencies are largely unregulated. However, it recognizes that crypto-assets are one of the fastest-growing innovations in the country’s securities market.
Notably, Ireland is being considered by Binance, the world’s largest cryptocurrency exchange by trading volume, as a location for one of several headquarters it plans to build. According to a report by the Irish Independent, a local news outlet, Binance has registered four corporate entities in the country already.
The post Ireland Declares That The Crypto Market Will Not Gain Access To Retail Funds appeared first on CoinGape.
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