British politician Lord Hammond has cautioned investors about putting their money into cryptocurrency. The former UK chancellor of the exchequer believes investing in crypto is “gambling money”. He feels people should be extremely cautious.
Lord Hammond told The Mail that large and reputable established asset managers are increasingly dipping their toes into cryptocurrency. The politician says they have exposed a tiny proportion of their asset base to a highly volatile asset class. He believes it is not suitable for retail investors as a mainstream investment category.
The former British chancellor of the exchequer said many people have a small exposure to crypto-assets. He pointed out that by doing so, they have written off their money. Lord Hammond has sounded the warning even as he is a senior advisor at Copper, a crypto firm.
The politician had earlier said that digital assets could give London a unique edge over European competitors. In an interview with City A.M, Lord Hammond said he hoped legislators would support the use of the new technology to trade cryptocurrencies and create a tokenized financial services sector.
He also drew attention to the UK’s lack of regulatory clarity on digital assets. Lord Hammond said the regulatory community has turned a blind eye to some newer technology developments due to the hype of Brexit. But he acknowledges that the distributed ledger technology – blockchain will eventually take over. Lord Hammond says they can grasp the opportunities provided by the new technology.
Ten days ago, the Bank of England issued a similar warning about the rising crypto market. The central bank said cryptocurrencies are risky for the UK’s financial stability. Governor Andrew Bailey criticized bitcoin and other cryptocurrencies alike because of their high volatility. He also highlighted El Salvador’s adoption of bitcoin as legal tender as a worrying sign.