Sri Lanka warns public not to use cryptocurrencies amid economic upheaval

Colombo, July 13 (IANS) The Central Bank of Sri Lanka has warned the public from using cryptocurrencies amid the grave economic crisis in the country, saying that this market is "largely unregulated".
 
Sri Lanka warns public not to use cryptocurrencies amid economic upheaval

Colombo, July 13 (IANS) The Central Bank of Sri Lanka has warned the public from using cryptocurrencies amid the grave economic crisis in the country, saying that this market is "largely unregulated".

The bank, CBSL, said in a notice that the public is "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 Virtual Currencies (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, the bank added.

The warning came as new Prime Minister Ranil Wickremesinghe on Wednesday ordered imposition of curfew in the Western Province with immediate effect and emergency law island wide.

Security forces were directed to arrest people acting in a riotous manner and seize the lorries they were travelling in.

On July 9, braving similar forces, people took control of the President's house, his office and Prime Minister's official residence symbolically overtaking the government and the presidency.

The CBSL said that virtual currencies are largely unregulated digital representations of value that are issued by private entities and can be electronically traded.

"CBSL 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," said the bank.

Furthermore, 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, it added.

"Therefore, VCs are considered as unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage in Sri Lanka," the bank said.

--IANS

na/pgh