CBSL warns it didn't approve virtual currencies

CBSL warns it didn’t approve virtual currencies

The Central Bank of Sri Lanka says it has not given licence or authorization to any entity or company to operate schemes involving virtual currencies, including cryptocurrencies, and has not authorized any Initial Coin Offerings or ICOs.

Issuing a statement, the Central Bank said it is aware of the growing interest in virtual currencies, both domestically and internationally.

It said the term “virtual currencies” is commonly used to refer to digitally created representations of value that are issued by private developers and denominated in their own unit of account. Common examples of virtual currencies are cryptocurrencies such as Bitcoin, Litecoin and Ethereum.

The CBSL said virtual currencies are not central bank issued currency. The CBSL said the value of virtual currencies is dependent on speculation and is not backed by an underlying asset or a regulatory framework.

Due to this, virtual currencies may demonstrate major volatility. Similarly, there appears to be a high probability of virtual currencies being used in illegal activities.

Further, the CBSL said though unintentional, their usage could amount to breaches of anti-money laundering and combating the financing of terrorism laws.

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