Banking

Crypto investments more like a ponzi scheme, warns Gabriel Makhlouf

Certain unbacked cryptocurrencies “similar to purchasing a lottery ticket: you might win but you probably won’t,” the Central Bank Governor said

Gabriel Makhlouf: There is “urgent need for policy action” to protect consumers. Picture: Patrick Browne

Describing cryptocurrency as an investment is “an abuse of the word”, since it is more accurate to describe them as a “Ponzi scheme,” Gabriel Makhlouf, the Irish central bank governor, has said.

Certain unbacked cryptocurrencies — those not backed by tangible assets — “should be treated with a large dose of scepticism”, Makhlouf wrote in a blog on the Central Bank of Ireland website.

Such investments were “similar to purchasing a lottery ticket: you might ...