Slovenia’s FSB Issues a Stern Warning Against Digital Currencies

A different attitude has been developing with some central banks announcing trial runs of prototype cryptocurrencies.

Slovenia’s Financial Stability Board, the nation’s financial watchdog, advised consumers to be mindful of potential risks of digital currencies and related investment schemes.

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The FSB has noted the interest of the public in virtual currencies, saying that of late it has increased “very much”, particularly as an investment opportunity. As such, participants in such markets are exposed to heightened risk of fraud when investing in assets or schemes that operate online or outside Slovenia.

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The FSB’s basic point was that such currencies were issued by private developers and dominated in units that are not attached to a fiat currency. It added that popular cryptocurrencies such as Bitcoin are not issued or managed by the central bank or any other sovereign authority in the member country of the European Union.

“Investors in virtual currencies … have to take into consideration whether risks are in line with their personal preferences and investment goals,” the board said in a statement.

A different attitude toward digital currencies has been developing recently with central banks in Russia and China already announcing trial runs of prototype cryptocurrencies, which could serve as rivals to the likes of Bitcoin and Etherium.

Part of this progress, however, was achieved only because the authorities in these countries don’t want to cede the cryptocurrency space to companies it has no control over, claiming that this could create long-term damage to national economies.

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