CB reiterates warning against usage of virtual currencies

The Central Bank yesterday renewed its warnings issued against the usage of virtual currencies stressing that it hasn’t issued any license or authorisation to any entity or company to operate schemes involving virtual currencies, including cryptocurrencies, and has not authorised any initial coin offerings (ICO), mining operations or virtual currency exchanges.

The Central Bank further said as per the Directions No. 03 of 2021 under Foreign Exchange Act, No. 12 of 2017 issued by the Department of Foreign Exchange of CBSL, 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. 

“Therefore, VCs are considered as unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage in Sri Lanka,” a Central Bank statement said. The Central Bank issued two press releases in 2018 and 2021 cautioning the usage of virtual currencies. 

The Central Bank said yesterday’s statement was issued considering the recent developments in relation to virtual currency usage in international and domestic markets as well as the inquiries related to the same. “The public is therefore 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 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 statement said.