Danish central bank head issues stark warning on 'deadly' bitcoin

COPENHAGEN (Reuters) - Potential investors in bitcoin should steer clear of a dangerous gamble and not complain to financial regulators if things do go wrong, Denmark’s central bank governor warned.

FILE PHOTO: Virtual currency Bitcoin tokens are seen in this illustration picture, December 8, 2017. Picture taken December 8. REUTERS/Dado Ruvic/Illustration/File Photo

“You should stay away (from bitcoin). It is deadly,” central bank head Lars Rohde said in an interview with state broadcaster DR published online on Monday.

The comments echoed concerns of a bubble about to burst made by other market participants and central bankers after the price of bitcoin rocketed more than 1,800 percent since the start of the year.

Rohde said that if people decide to ignore his warnings, they should realize that they are pretty much on their own.

“It is not a regulated market. It is not the responsibility of the authorities. It is the responsibility of the individual,” said Rohde.

Emphasizing his point, Rohde told investors not to “come and complain to us if it goes wrong”.

The launch of futures trading in bitcoin has further fueled debate about the place of the cryptocurrency in the financial system.

On Sunday, France’s finance minister said his country would propose that the G20 group of major economies discuss regulation of the bitcoin virtual currency next year.

Decentralized digital currencies like bitcoin are still not widely accepted, and critics say that the fact that they are unregulated makes them risky to use.

European Union states and legislators last week agreed stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies.

“I see bitcoin as tulipmania, which is a bubble that is out of control,” Rohde said, referring to a notorious 17th century Dutch boom and bust.

Last week, the Danish central bank said that introducing a digital version of the Danish crown currency would pose risks to financial stability without improving payment solutions for Danes.

Reporting by Stine Jacobsen; Editing by Jacob Gronholt-Pedersen/Keith Weir