Sri Lanka’s central bank issued a warning regarding the use of cryptocurrencies amid a devastating economic and political crisis. The central bank stressed that it “has not given any license or authorization to any entity or company to operate schemes” involving cryptocurrencies.
Sri Lanka’s Central Bank Issues Notice About Cryptocurrency
The Central Bank of Sri Lanka (CBSL) published a notice about cryptocurrency Tuesday titled “Public Awareness in Relation to the Use of Virtual Currencies in Sri Lanka.” The notice cites “recent development in relation to virtual currency usage in the international and domestic markets as well as the inquiries related to virtual currency.”
Noting that “Virtual currencies (VCs) are largely unregulated digital representations of value that are issued by private entities and can be electronically traded,” the Sri Lankan central bank emphasized:
CBSL does not grant any authority or license to entities or companies to use schemes involving VCs and cryptocurrencies.
The central bank further noted that it “has not authorized any initial coin offerings (ICO), mining operations or virtual currency exchanges.”
Furthermore, the Central Bank of Sri Lanka warns that “Electronic Fund Transfer Cards (EFTCs) such as debit cards and credit cards are not permitted to be used for payments related to virtual currency transactions.” The notice continues:
VCs, therefore, are unregulated financial tools and do not have any regulatory oversight.
“The public is, therefore, warned of the possible exposure to significant financial, operational, legal and security related risks as well as customer protection concerns posed to the users by investments in VCs,” the central bank concluded. “The public is also warned not to fall prey to various types of VC schemes offered through the Internet as well as other forms of media.”
Earlier this week, protesters stormed the former Sri Lankan prime minister’s compound. Wednesday saw President Gotabaya Rajapaksa flee the country. His actions are blamed for Sri Lanka’s current economic crisis, in which the nation is facing acute food and fuel shortages. Ranil Wickremesinghe, the Prime Minister of Sri Lanka was elected temporary leader on Friday.
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