Central Bank of Sri Lanka warns against using cryptocurrencies amid economic crisis

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Sri Lanka has warned its citizens against using the cryptocurrency, which it says is “largely unregulated” amid ongoing political chaos in the South Asian country.

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The country’s central bank, CBSL, said on Tuesday that it does not consider cryptocurrencies legal tender in the country and recalled that it has not licensed or otherwise authorized any entity to operate in the country.

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Citing its previous warnings issued in 2018 and 2021, the central bank said it has also not authorized any initial coin offerings (ICOs) or mining operations and virtual currency exchanges in the country. Virtual currencies are considered “non-regulated financial instruments and have no regulatory oversight or guarantees regarding their use” in the country.

“According to Directive No. 03 of 2021 under the Foreign Exchange Law No. 12 of 2017 issued by the Foreign Exchange Department of the CBSL, Electronic Funds Transfer Cards (EFTC) such as debit cards and credit cards are not permitted to be used . for payments related to transactions in virtual currency,” the bank said in a statement. posted on your website.

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The warning comes at a time when the sovereign debt crisis has hurt the local economy. The South Asian nation, which defaulted in May this year and is trying to secure imports of key commodities from other countries, said inflation has reached annual record 54.6 percent in June (PDF).

The total market value of final goods and services, as measured by the gross domestic product (GDP) standard, also fell by 1.6 percent in the first quarter of 2022.

The fall in the value of the local currency prompted many Sri Lankans invest in other assets and cryptocurrencies.

Major cryptocurrencies are also not in the best shape. In just a few months, the $2 trillion crypto market. fell over 56% to $873.03 billion.. Their reversal in growth coincides with a similar decline in public equity markets and private market trading activity.


Credit: techcrunch.com /

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