In the face of market volatility and uncertainty, the popularity of cryptocurrencies has soared to unprecedented levels in recent times, capturing the attention of individuals, businesses, and governments. As a result of the effect of their widespread adoption, the National Bank of the Kyrgyz Republic (NBKR), the country’s apex bank, has issued a warning about cryptocurrencies.
The NBKR disclosed that there are risks associated with cryptocurrencies, and it was important that residents were adequately informed about those risks before getting involved.
The NBKR further stated that cryptocurrencies are not legal tender; therefore, using them to make payments in the Kyrgyz Republic is prohibited.
With the proliferation of virtual assets such as cryptocurrencies and NFTs in the country, the NBKR noticed that some residents used them in conducting transactions, not minding that they were not legally recognized in the country.
Due to the volatility risks associated with crypto, the NBKR noted, “No one, as a rule, is liable for cryptocurrency. It does not have financial support. It has no real value due to the fact that it is not tied to any currency or other asset. ”
The bank also disclosed that the absence of a centralized authority overseeing the operations of cryptocurrencies was also a significant risk.
“Therefore, we recommend citizens be prudent and refrain from using cryptocurrency for payments and settlements. Users assume all possible risks and negative consequences when making settlements using cryptocurrency and virtual assets. ”
In recent times, an increasing number of central banks in various countries have warned residents about the risks associated with cryptocurrency usage.
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