FCA boss highlights issue of young people turning to crypto for investments
Financial Conduct Authority boss Nikhil Rathi said people risked losing their money.
City regulator boss Nikhil Rathi has described the volume of young people turning to cryptocurrency as their first taste of investment as “not great”.
Mr Rathi, chief executive of the Financial Conduct Authority (FCA), also told MPs that it could take decades for consumer culture to change in terms of people who are more risk-averse with their money.
Mr Rathi told the Treasury Committee one thing he thinks “is not great is the sheer number of under 35-year-olds for whom the financial product that they invest in first is crypto”.
He added: “Now that’s something that we want to engage in as well because we know there’s a very high risk and you could potentially lose all your money.”
Earlier in the hearing, asked how “shiftable” the consumer culture is in terms of people who are risk-averse with their money, Mr Rathi said: “I think this is going to take decades. I don’t think that one aspect of our work on its own will shift this.”
He continued: “We have issues that are quite serious that start in schools that carry on all the way through the workplace in terms of basic understanding of things like percentages, compound interest, and other choices that people have, before you get into even a discussion about people taking more risk with your hard-earned savings.
“We then have to make sure that we have the right accessibility to those products at the right point in people’s lives, including looking at how we can improve digital journeys, so people feel confident about accessing those products.”
Mr Rathi said there was also the question about confidence in the economy and growth “and that you’re going to get the returns”.
He also highlighted vulnerable customers who do not even have enough in savings put by that they can access for an emergency in the first place.
Mr Rathi continued: “But we also have millions of people who we believe have in excess of £10,000 in cash who perhaps don’t need to be holding that much in cash.”
