• Fri. Jun 21st, 2024

Kyrgyzstan’s Central Bank Warns Citizens About Cryptos

Jun 16, 2022

Amid the rising popularity of crypto in Kyrgyzstan, the nation’s central bank has issued a warning. The central bank reminded the populace of the risks linked with digital currencies. 

Also, the usage of crypto for payment purposes remains illegal. This is contrary to recent developments in different states embracing crypto payment.

Using Crypto For Payment Is Still Illegal In Kyrgyzstan 

Globally, the usage of digital currencies is spreading. Various countries are beginning to see the usefulness of crypto for payment and other purposes. Kyrgyzstan is no exception.

The adoption of digital assets has increased in Kyrgyzstan has grown tremendously. According to the country’s national bank, crypto usage for payment is still prohibited. 

As a result, it is unlawful for citizens to use crypto for buying and selling. The only accepted tender in the nation is the Kyrgyzstani Som.

Furthermore, the monetary agency warned about the risk associated with decentralized virtual currencies. It stated that;

“Digital currencies do not have any finacial support. Hence, no one can be held liable when something happens. Also, it has no actual value. This is because it is not back by any assets or currency.”

Consequently, the central bank noted that this leads to high volatility and instability. Furthermore, the National Bank of Kyrgyzstan (NBK) also discussed the usage of crypto for settlements. 

The NBK warned that there is no central body guiding the sector. As a result, it is open to all forms of shady dealings. The NBK concluded by saying:

“Therefore, we advice citizens and investors to exercise caution with crypto. Also, they should stop using digital currencies for settlements and payments. Users always bear the risks and consequences when they engage in crypto payment and settlements.”

Kyrgyzstan, Kazakhstan And Crypto Miners

The NBK’s statement is coming after its neighbor, Kazakhstan, tightened regulation on cryptocurrencies. Last week, Kazakhstan’s central bank announced it would examine the cryptocurrency market. However, it believes that the legalization of crypto is too early.

Meanwhile, Central Asia houses Kyrgyzstan and Kazakhstan. In 2021, the region attracted a large number of crypto businesses. They ranged from crypto exchanges to crypto mining companies. 

Meanwhile, most of the companies were crypto miners who left China in 2021. Since then, both countries have made efforts to limit crypto mining activities. 

Initially, they started by closing all illegal cryptocurrency mining farms. Afterward, they increased the bill on electricity for legal mining enterprises. This was after citizens blamed crypto miners for continuous power shortage and power failure. 

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