The Central Bank of Sri Lanka (CBSL) has warned its citizens again about the use of cryptocurrencies, highlighting the “largely unregulated digital representation of value” status of those currencies in the country.
The announcement was made during the latest financial crisis that has been taking place in the South-Asian nation. Sri Lanka has registered inflation that touched a year-on-year record (54%) and fell into default last May.
Warnings about cryptos are not new for Sri Lankans, as the CBSL already has talked about the subject before in 2018 and 2021, making people aware of its potential “risk” and “consumer protection concerns” when comes to cryptocurrencies.
“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 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”-Central Bank of Sri Lanka
CBSL also states that it has not given any license or authorization to any entity or company to operate schemes involving VCs, including cryptocurrencies, and has not authorized any Initial Coin Offerings (ICO), mining operations, or Virtual Currency Exchanges.
Sri Lanka’s central bank statement goes in the opposite direction of what other nations have been doing.
Understanding the potential of a seamless and no-middlemen currency, countries such as El Salvador are not only accepting but making cryptos legal tender.
Of course, El Salvador is an example of a completely opposite side of what Sri Lanka has positioned itself on.
However, since economical issues have been impacting nations worldwide, it seems wise not to disregard cryptos completely and start considering other means of moving the economy as a practical and understandable opportunity.