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Saturday, November 18, 2017

Kyrgyz's central bank warns of risks of bitcoin, other virtual currencies

The National Bank of the Kyrgyz Republic issued a warning recently about the spread and use of virtual currencies such as bitcoin.

"We should not forget that under the legislation of the Kyrgyz Republic the sole legal tender on the territory of our country is the national currency of Kyrgyzstan 'som,'" the central bank said in a press release. And the use of 'virtual currency,' bitcoins, in particular, as a means of payment in the Kyrgyz Republic will be a violation of the law of our state."

It went on to state that among the risks and consequences associated with the use of virtual currency are the lack of material financial support or mediation of any financial institutions or government and the fact that such currency does not have real value.

The National Bank of the Kyrgyz Republic recommended that consumers not use 'virtual currency,' to decline to participate in the operations of their purchase and sale and exchange for other currencies or assets.

"Persons or entities in any way using 'virtual currency' subject to the above mentioned risks," the bank said. "And also, when involved in these activities, they assume all the possible negative consequences of the possible violation of the legislation of the Kyrgyz Republic."