One of Central Asia's national bank has issued a warning regarding cryptocurrency

16-Jun-2022 By: Sudeep Saxena

One of Central Asia's national bank has issued a warning regarding cryptocurrency

In the wake of the rising popularity of cryptocurrencies in Kyrgyzstan, the country's central bank has issued a warning to residents about the dangers of digital assets. Crypto payments are likewise banned in the Kyrgyz Republic, according to the monetary authorities.

Cryptocurrencies and other virtual assets are becoming more popular in Kyrgyzstan, according to the country's central bank. Using them to buy or sell goods and services is still illegal, according to the regulator, with the Kyrgyz SOM remaining the country's sole legal money.

The monetary authority also issued a warning about the hazards associated with decentralized digital currencies, according to local media. "In most cases, no one is held responsible for cryptocurrency." It is not financially supported. It has no actual value because it is not linked to any currency or other asset," the report stated.

According to the National Bank of Kyrgyzstan (NBK), this increases the danger of exchange market instability and loss of value. It also highlighted the dangers of cryptocurrency settlements, citing its characteristics and the lack of a "controlling central entity." The NBK went on to say

As a result, we advise citizens to exercise caution and avoid utilizing cryptocurrencies for payments and settlements. When conducting settlements using cryptocurrencies and virtual assets, users incur all possible risks and unfavorable repercussions.

The announcement comes after Kazakhstan's central bank declared last week that it is looking into the crypto industry, but that it is too early to talk about legalizing cryptocurrencies like BTC.

Last year, crypto firms, particularly miners, flocked to Central Asia, where the two nations are located, when China began cracking down on the industry in May 2021. Since then, both countries have attempted to curb mining by closing down illicit crypto farms and hiking power bills for legitimate mining operations. Miners have been accused of power outages and damage to the electricity networks.

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