Dominican Republic's top financial regulator issues warning on cryptocurrency risks
Date: 2024-08-22 Author: Gabriel Deangelo Categories: IN WORLD
The Dominican Republic's top financial regulator has warned citizens of the risks of investing in cryptocurrencies.
According to Acento, Alejandro Fernandez, the Dominican Republic's Superintendent of Banks, said the Monetary Council's "official position" on cryptocurrencies is "caution." He also stressed that cryptocurrencies do not have the characteristics necessary to become "legal tender" in the country.
The Monetary Council is the body that regulates official institutions such as the Central Bank of the Dominican Republic.
Fernandez noted that using a technology that is still evolving and has no clear regulatory framework in the country comes with "risks and challenges."
“The official position on crypto assets is mainly one of caution and warning the public about the risks that crypto assets may pose,” said Alejandro Fernandez.
He added that while “cryptocurrencies are gaining popularity worldwide,” they “do not meet the requirements to be recognized as legal tender in the Dominican Republic.”
Fernandez also emphasized that cryptocurrencies are characterized by “extreme volatility” and pose a “danger” to investors due to their “speculative” and “uncontrolled” nature.
He also noted that while some people are attracted by the “absolute freedom” of cryptocurrencies, they can also be used to finance illegal activities.
The regulator acknowledged that blockchain technologies have “innovative potential.” However, the Superintendent of Banks called on financial authorities to prioritize the protection of crypto users and education about the risks associated with them.
Fernandez stressed that education and user protection measures should be a priority for Dominican regulators.
He also urged citizens to improve their online security practices, explaining that they should not share sensitive personal information or passwords on public networks.
Fernandez noted that the population should be especially wary of suspicious messages, especially when it comes to links sent via WhatsApp, which can lead to account hacking.
The Latin American Financial Action Group (GAFILAT) has previously warned the Dominican Republic about the need to strengthen cryptocurrency regulation.
Despite the warnings, cryptocurrency popularity and adoption rates remain high in the country, with crypto exchanges like Binance continuing to expand their operations in the Dominican Republic and Latin America as a whole.
