The Central Bank of Sri Lanka (CBSL) has recently issued a warning to the public about the risks associated with investing in cryptocurrencies.
The bank urged individuals to refrain from trading cryptocurrencies and participating in ICOs, citing a large number of complaints from users who have suffered losses from such investments or become victims of cryptocurrency scams.
In the past, the CBSL has cautioned about the financial, operational, and legal risks associated with investing in digital assets, as well as the risks concerning the security of users and the protection of confidential data.
The regulator noted that these risks have already materialized, citing the collapse of several cryptocurrency companies in the past year.
In Sri Lanka, cryptocurrencies are considered unregulated investment vehicles, and the CBSL does not recognize them as an asset class.
Digital assets are not considered legal tender in Sri Lanka, and there are no regulations in place for their use. Therefore, according to the Foreign Exchange Law of 2017, debit and credit cards are prohibited from being used for cryptocurrency transactions.
The CBSL emphasized that digital assets do not contribute to the development of the domestic economy, but rather contribute to the devaluation of the state currency.
The bank also warned of the growing number of scammers promising high returns on investments in crypto assets, advising local residents not to participate in cryptocurrency schemes advertised on the Internet or in the media.
Furthermore, the CBSL stated that it has not issued any licenses to individuals or legal entities to work with cryptocurrencies, organize an ICO, mine cryptocurrencies, or provide any cryptocurrency services, including custodial services or advice on investments in digital assets.
In February, the CBSL declared that the Sri Lankan government would not accept bitcoin, as the introduction of decentralized cryptocurrencies could exacerbate the country’s economic crisis.