Sri Lanka’s central bank issued a warning about the use of cryptocurrencies amid a devastating economic and political crisis. The central bank insists that it “does not grant licenses or authorization to entities or companies to operate schemes” involving cryptocurrencies.
The Central Bank of Sri Lanka issued a statement on Cryptocurrency
The Central Bank of Sri Lanka (CBSL) published a news story on cryptocurrency Tuesday with the title “General Awareness on the Use of Virtual Currency in Sri Lanka.” The report mentions “recent developments regarding the use of virtual currency in international and domestic markets as well as questions related to virtual currency.”
Noting that “virtual currencies (VCs) are generally unregulated digital representations issued by private entities and can be traded electronically,” Sri Lanka’s central bank stressed:
CBSL does not license or authorize any entity or company to operate schemes involving VCs, including cryptocurrencies.
The central bank further noted that it “does not authorize initial coin offerings (ICOs), mining operations or virtual currency exchanges.”
Furthermore, the Central Bank of Sri Lanka warned that “Electronic Funds Transfer Cards (EFTC) such as debit cards and credit cards are not permitted to be used for payments related to virtual currency transactions.” The news continues:
Hence, VCs are considered to be unregulated financial instruments and have no regulatory oversight or safeguards related to their use in Sri Lanka.
“The public, therefore, is warned about the possible financial, operational, legal and security risks associated with financial risks, as well as the customer protection issues posed to users by investing in VCs,” the central bank said. “The public is also warned not to be the future for the various types of VC schemes being offered over the Internet as well as other media.”
Earlier this week, protesters attacked the complex of the former Sri Lankan prime minister. President Gotabaya Rajapaksa fled the country on Wednesday. He has been blamed for the deep economic crisis as Sri Lankans face shortages of food, fuel, and other basic supplies. Prime Minister Ranil Wickremesinghe was sworn in on Friday as interim leader.
What do you think about Sri Lanka’s central bank warning about cryptocurrency in the midst of a severe economic crisis? Let us know in the comments section below.
Image Credit: Shutterstock, Pixabay, Wiki Commons, lev radin
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not advise on investment, tax, legal, or accounting. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on the content, goods or services mentioned in this article.