The president of Brazil’s central bank has rebuked bitcoin, comparing the cryptocurrency to a pyramid scheme.

Brazilian central bank president Ilan Goldfajn has taken a dismissive stance against bitcoin and criticized the marked growth in the value of the cryptocurrency this year. Since the turn of 2017, the cryptocurrency has grown from $1,000 to its recent all-time high of $5,920.

According to the official, investors of bitcoin are only buying in to fuel its appreciation and are therefore contributing to a pyramid scheme. A typical pyramid scheme sees operators encourage investors to buy rope in new investors to fuel an unsustainable revenue stream reliant on new capital from investors.

In quotes reported by RTTNews, the central banker stated:

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].

He went on to add that “the central bank is not interested in bubbles or illicit payments” while stressing the need to “separate” bitcoin from other applications of blockchain, the cryptocurrency’s underlying decentralized technology.

The influential figure’s comments are notable, particularly when the central bank is planning regulations for the cryptocurrency and FinTech sector at a time when Brazil is reeling from its worst-ever recession following political scandals and money mismanagement. Brazil has seen a notable rise in its appetite for bitcoin in recent years. One report by a Brazilian non-profit revealed that bitcoin trading among Brazilian cryptocurrency exchanges surpassed gold spot trading on Brazil’s securities exchange in the first half of 2016.

It is yet unknown if Goldfajn’s comments have a material impact on the upcoming regulations. Market observers have previously called Brazil’s central bank, the Banco Central do Brasil (BSB) – as the only governing body left to save [Brazil’s] economy.

Featured image from Flickr/Senado Federal.