Central Bank of Kyrgyzstan Warns of Crypto Payment Risks

As the ryptocurrencies and other virtual assets are increasingly spreading in Kyrgyzstan, the nation's central bank recently reminded that using them to buy or sell goods and services is still against the law, with the Kyrgyzstani som remaining the only legal tender in the country.

Quoted by local media, the monetary authority also issued a warning regarding the risks linked to decentralized digital currencies. "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," it said.

This creates high risks of exchange rate volatility and loss of value, the National Bank of Kyrgyzstan (NBK) elaborated. It also pointed to the risks with settlements in cryptocurrency, stemming from its features and the absence of a "controlling central body." The NBK further stated: "Therefore, we recommend citizens to 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."