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UAE Central Bank warns against cryptocurrencies — again

Central Bank governor describes recent plunge in US stock market as ‘healthy correction’

Gulf News

Dubai: The head of the UAE’s Central Bank reiterated a warning against trading cryptocurrencies amid stronger volatility in the market and as many Asian countries look into banning the trade of Bitcoin.

Asked about his views on cryptocurrencies during a conference, Mubarak Rashid Al Mansouri, governor of the Central Bank, simply said, “Avoid.”

“I think we have been very explicit that this is not approved by the Central Bank and we should be very careful. I mean, we have seen the fluctuations already, so, avoid,” he told reporters on Saturday.

The governor’s warning on cryptocurrencies follows similar remarks he made in late October when he said that such currencies pose risks of money laundering or terrorism funding as they do not go through official channels and cannot be monitored.

Last week, the Securities and Commodities Authority (SCA), the financial market regulator in the UAE, also expressed a similar sentiment. In a statement, the Authority said it wanted to “raise the alarm about all digital, token-based fund-raising activities or schemes.”

SCA urged investors to be “fully aware of risks associated with ICOs [Initial Coin Offerings].”

Positive outlook

Speaking at the Arab Fiscal Forum in Dubai, Al Mansouri also said the outlook is more positive for the UAE’s economic growth.

“The situation is improving, with oil prices going up as well as the fundamentals of the economy with regards to non-oil GDP [gross domestic product] contribution, so that will help the UAE economy,” the governor said.

He added that the banking sector in the country was in a good position.

Asked about the recent volatility in financial markets, specifically in the US where stock indices plunged last week, Al Mansouri did not express concerns.

“I think it’s only normal. It’s a healthy correction. Markets have been going up for some time, but what’s comforting is that fundamentals are still positive,” he said.

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