The head of Brazil’s central bank took a harsh position toward bitcoin earlier this week, comparing the cryptocurrency to a pyramid scheme.

According to RttNews, central bank president Ilan Goldfajn was dismissive of recent price appreciation in the bitcoin market. And while he said it was key to “separate” bitcoin from other applications of its underlying technology, Goldfajn said that those buying cryptocurrencies are chasing the same kind of returns as those who invest in pyramid scams.

He was quoted as saying:

“The bitcoin is a financial asset with no ballast that people buy because they believe it will appreciate. That is a typical bubble or pyramid [scheme].”

In a pyramid scheme, organizers solicit investors who are then encouraged to find new buyers themselves, thereby creating a revenue stream based on new investments rather than the underlying product itself.

The president continued by confirming that the Banco Central do Brazil “is not interested in bubbles or illicit payments” and that such activities are “not something the central bank would like to encourage.” The stance is notable given that legislators in Brazil are currently working on rules for cryptocurrency activity in the country. Whether Goldfajn’s comments have an impact on that process remains to be seen.

The Banco Central do Brazil issued a notice in 2014 about the risks of investing in cryptocurrencies, later publishing a research note on blockchain use cases in September.

Ilan Goldfajn image via Flickr