Amid the growing popularity of cryptocurrencies in Kyrgyzstan, the country’s central bank has reminded citizens of the risks associated with digital assets. The monetary authority also warned that crypto payments are illegal in the Kyrgyz Republic.
The National Bank of Kyrgyzstan urges caution with cryptocurrencies
Cryptocurrencies and other virtual assets are becoming more and more widespread in Kyrgyzstan, the nation’s central bank recently noted. The regulator recalled that using them to buy or sell goods and services remains illegal, and that the Kyrgyz som remains the only legal tender in the country.
Cited by local media, the monetary authority also issued a warning about the risks linked to decentralized digital currencies. “No one, as a rule, is responsible for cryptocurrencies. It does not have financial support. It has no real value because it is not linked to any currency or other asset,” he said.
This creates high risks of exchange rate volatility and loss of value, explained the National Bank of Kyrgyzstan (NBK). He also pointed out the risks of cryptocurrency settlements, stemming from their characteristics and the absence of a “central control body.” The NBK further stated:
Therefore, we advise citizens to be prudent and refrain from using cryptocurrencies for payments and settlements. Users bear all possible risks and negative consequences when transacting using cryptocurrencies and virtual assets.
The authority’s statement comes after the central bank of neighboring Kazakhstan announced last week that it is examining the cryptocurrency market and stressed that it is too early to talk about legalizing cryptocurrencies such as bitcoin.
Central Asia, where the two countries are located, attracted crypto firms last year, especially miners after China began cracking down on the industry in May 2021. Since then, both nations have sought to limit mining by shutting down crypto farms. illegal and increasing electricity rates for authorized mining companies. Miners have been blamed for power shortages and damage to power grids.
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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