Amid the growing popularity of cryptocurrencies in Kyrgyzstan, the country’s central bank has reminded citizens about the risks associated with digital assets. The Monetary Authority also warned that crypto payments are illegal in the Kyrgyz Republic.
National Bank of Kyrgyzstan Urges Caution With Cryptocurrency
The country’s central bank recently said that cryptocurrencies and other virtual assets are spreading rapidly in Kyrgyzstan. The regulator reminded that using them to buy or sell goods and services is still against the law, with Kyrgyzstan remaining the only legal tender in the country.
Quoted by local media, the monetary authority also issued a warning about the risks associated with decentralized digital currencies. “No one, as a rule, is liable for cryptocurrency. It does not have financial backing. It has no real value due to the fact that it is not tied to any currency or other asset,” it said.
This creates high risks of exchange rate volatility and loss of value, the National Bank of Kyrgyzstan (NBK) explained. It also pointed to the risks associated with settlements in cryptocurrency, arising from its characteristics and the absence of a “controlling central body”. NBK added:
Therefore, we advise citizens to be prudent and refrain from using cryptocurrencies for payments and settlements. Users assume all potential risks and negative consequences when making settlements using cryptocurrencies and virtual assets.
The authority’s statement comes after the central bank of neighboring Kazakhstan announced last week that it was investigating the crypto market, while emphasizing that it is too early to talk about the legalization of cryptocurrencies such as bitcoin.
Central Asia, where both countries are located, attracted crypto businesses last year, especially miners after China cracked down on the industry in May, 2021. Both countries have since tried to limit mining by shutting down illegal crypto farms and raising electricity rates. Authorized mining enterprise. Miners have been blamed for power outages and damage to power networks.
Do you expect the National Bank of Kyrgyzstan to change its policy towards cryptocurrencies in the future? Tell us in the comments section below.
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