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The central bank of Sri Lanka has issued a warning regarding the use of cryptocurrencies in the face of a catastrophic economic and political crisis. The central bank emphasized that it “has not given an entity or company a license or approval to operate the scheme,” including cryptocurrencies.
The Central Bank of Sri Lanka (CBSL) released a notice on cryptocurrencies entitled “General Awareness Related to the Use of Cryptocurrencies in Sri Lanka” on Tuesday. This notice cites “Recent Developments in the Use of Cryptocurrencies in International and Domestic Markets, and Inquiries Regarding Cryptocurrencies.”
The Central Bank of Sri Lanka emphasized that “Cryptocurrencies (VCs) are mostly digital representations of unregulated value, issued by private companies and can be traded electronically.”
CBSL does not license or authorize an entity or company to operate a scheme that includes VCs that include cryptocurrencies.
The central bank further said, “We do not allow initial coin offerings (ICOs), mining operations, or cryptocurrency exchanges.”
In addition, the Central Bank of Sri Lanka warns that “electronic remittance cards (EFTCs) such as debit cards and credit cards are not allowed to be used for payments related to cryptocurrency transactions.” Notifications continue:
Therefore, VCs are considered unregulated financial instruments and have no regulatory oversight or safeguards for use in Sri Lanka.
“Therefore, the general public is warned that investing in VC may expose users to significant financial, operational, legal, security-related risks, and customer protection concerns,” Central said. The bank concluded. “The general public is warned not to be a prey to the various types of VC schemes offered through the internet and other forms of media.”
Earlier this week, protesters attacked a compound of the former Prime Minister of Sri Lanka. President Gotabaya Rajapaksa fled the country on Wednesday. He has been blamed for a serious economic crisis as the Sri Lankans face a serious shortage of food, fuel and other basic supplies. Prime Minister Ranil Wickremesinghe swore on Friday as an extraordinary leader.
What do you think of the Central Bank of Sri Lanka, which warns of cryptocurrencies in the midst of a serious economic crisis? Let us know in the comments section below.
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