(Bloomberg) -- Most retail investors who have put money into digital currencies probably don’t understand exactly what they bought or the risks involved, a Bank of England official said.

Jon Cunliffe, deputy governor for the UK central bank, stepped up his call for authorities to regulate cryptoassets to ensure the market is stable and transparent.

“There’s a long tail of retail investors who have invested in cryptoassets,” Cunliffe said at a web event on Tuesday hosted by the Wall Street Journal. “Do they all understand what they’ve invested in? I think not. For that long tail of retail investors, I’m not sure they do understand. They don’t really see this as a financial investment.”

The BOE is at the forefront of calls for a global framework overseeing digital currencies, noting that the $1.7 trillion market is now bigger than the subprime mortgage market was when it rattled global markets in 2008.

So far, he said volatility in the digital currency markets hasn’t spread to the broader financial system because links between the two aren’t yet fully developed. However, those risks are growing.

“There’s no intrinsic value around crypto assets,” Cunliffe said. “They move with sentiment. They’re being moved mainly as a risky asset, and prices have been going down pretty consistently.”

Cunliffe said rules should match what the digital assets are being used for. Those sold as a way to make payments should offer the stability and reliability of cash, while ones offered as a speculative investment could be regulated like “gambling.”

Consumers, he said, should be careful about how much crypto they include in personal pension funds, treating it as a risky security.

“If you have that as a proportion of your portfolio, you have to realize it is highly speculative,” Cunliffe said. “You could lose all your money. You could make a sizable capital gain. It’s important for investors to understand the characteristics of this investment.”

Read More: 

  • BOE Pushes for Tougher Regulation of $1.7 Trillion Crypto Market
  • BOE Says Crypto Now Bigger Than Subprime Debt That Led to Crash
  • U.K. Lords See No Convincing Case for BOE to Make Digital Pounds


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