Sri Lanka warns public not to use cryptocurrencies amid economic upheaval as new PM imposes curfew

• The Central Bank of Sri Lanka warns against “largely unregulated” cryptocurrency market.
• Electronic Fund Transfer Cards (EFTCs) such as debit cards and credit cards are not permitted to be used for virtual currency transactions.
• Announcement comes as Sri Lanka’s new PM Ranil Wickremesinghe imposes curfew in western province of the country.

The Central Bank of Sri Lanka has warned the public against 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 imposed curfew in the Western Province with immediate effect. Security forces were directed to arrest people acting in a riotous manner and seize the lorries they were traveling 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. 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 , mining operations or virtual currency exchanges,” said the bank.

Furthermore, Electronic Fund Transfer Cards (EFTCs) such as debit cards and credit cards are not allowed for 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.

Inputs from IANS

SEE ALSO:

Rishi Sunak promises to run the British economy like the iron lady, Margaret Thatcher

Explained: International trade settlement in Rupees and why RBI is doing it