The Norwegian Financial Supervisory Authority (FSA) said Tuesday there is a need for a legal framework if cryptocurrency is to become a suitable form of investment for consumers.
In a post, the FSA said cryptocurrencies received increased attention recently along with significant criminal activity. In addition, the high volatility associated with crypto creates a high risk of loss, the authority said.
The regulatory body stressed the cryptocurrency market remains largely unregulated and consumer protections are needed.
In September 2020 the European Commission presented a proposal for regulation of the crypto market, but the rules won’t be in place for several years, the FSA noted.
“Until such regulations are in place, anyone considering trading in cryptocurrency should think carefully and understand the significant risk that such investments entail. Consumers who want to try this with open eyes should not invest more than they can afford to lose,” said the FSA.
Norway is known as the world’s most cashless country with only 4% of the country’s payments conducted with banknotes and coins. in response to a massive Celine in cash usage, the Norwegian central bank initiated research of a central bank digital currency in April 2021.
Source: Coindesk and Cointelegraph