Sri Lanka’s central bank has issued a warning on the use of cryptocurrencies amid a devastating economic and political crisis. The central bank stressed that it has “not granted any license or authorization to any entity or company to operate any scheme” involving cryptocurrencies.
Sri Lanka’s Central Bank Issues Notice on Cryptocurrencies
Sri Lanka’s Central Bank (CBSL) on Tuesday issued a notice on cryptocurrencies titled “Public awareness related to the use of virtual currencies in Sri Lanka.” The notice cites “recent developments related to the use of virtual currencies in international and domestic markets, as well as inquiries related to virtual currencies.”
Noting that “virtual currencies (VCs) are digital expressions of value that are issued by private entities, can be traded electronically, and are largely unregulated,” the Sri Lankan central bank stressed.
CBSL has not granted any license or authorization to any entity or company to operate a scheme involving VCs, including cryptocurrencies.
The central bank further noted that it has not authorized “any initial coin offerings (ICOs), mining operations or virtual currency exchanges.”
In addition, the Central Bank of Sri Lanka warned that “the use of electronic funds transfer cards (EFTCs) such as debit and credit cards for payments related to virtual currency transactions is not permitted.” The notice continues.
Therefore, virtual currency is considered an unregulated financial instrument and there is no regulatory oversight or safeguards for its use in Sri Lanka.
{The Central Bank concludes that “The public is therefore warned that they may be exposed to significant financial, operational, legal and security-related risks and customer protection concerns posed to users by investing in VCs.” The public is also warned not to fall prey to the various types of VC schemes offered through the Internet and other media.”
Earlier this week, demonstrators stormed the residence of 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 severe shortages of food, fuel, and other basic commodities.
Image Credits: Shutterstock, Pixabay, Wiki Commons, lev radin.
