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The Central Bank briefs the public on the dangers posed by virtual currencies.

Published:

The Central Bank of Sri Lanka has issued a statement to inform the public about the use of virtual currencies in Sri Lanka.

The bank explained that the statement was issued after taking into account recent developments pertaining to virtual currency used on international and domestic markets, as well as inquiries pertaining to virtual currency.

Full statement:

Virtual Currencies (VCs) are digital representations of value issued by private entities and capable of being electronically traded.

CBSL has previously informed the public through press releases in 2018 and 2021 that it has not granted any entity or company a license or authorization to operate schemes involving VCs, including cryptocurrencies, nor has it authorized Initial Coin Offerings (ICO), mining operations, or Virtual Currency Exchanges. In addition, as per Directions No. 03 of 2021 issued by the Department of Foreign Exchange of CBSL under Foreign Exchange Act No. 12 of 2017, Electronic Fund Transfer Cards (EFTCs) such as debit cards and credit cards cannot be used for payments related to virtual currency transactions. Consequently, VCs are regarded as unregulated financial instruments and have no regulatory oversight or protections in Sri Lanka.

Investments in VCs may expose users to significant financial, operational, legal, and security-related risks, as well as concerns regarding customer protection. The public is also cautioned against falling for various types of VC schemes promoted via the Internet and other forms of media.

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