Sri Lanka tells citizens to avoid cryptocurrency

Sri Lanka warns citizens They are asked to avoid it Use or trade digital currencies whenever possible.

Sri Lanka seems to be very anti-cryptocurrency

The warning comes at a time when the entire world seems to be rethinking its attitude towards cryptocurrencies. At the time of writing, the cryptocurrency space has been going through a period of suffering like no other. For example, Bitcoin, the world’s number one digital currency by market capitalization, has lost more than 70 percent of its value since the beginning of November.

During that period, the coin was trading for a new all-time high of around $68,000, although it has since fallen to around $20,000, and it is struggling to maintain that position. The cryptocurrency arena has also lost more than $2 trillion in overall valuation.

The Central Bank of Sri Lanka – also known as the CBSL – said in a recent note that it is not considered legal tender for cryptocurrencies. Thus, they cannot be used to make payments for goods and services, and the state does not recognize these assets as official money. In addition, regulators in Sri Lanka said that they have not issued any financial licenses for cryptocurrency exchange or similar businesses to operate within the country’s borders.

Sri Lanka says the entire crypto space is “largely unregulated,” and that traders need to be very careful when dealing with assets like Bitcoin and Ethereum. On its website, the bank stated the following:

As per Directive 03 of 2021 under the Foreign Exchange Act No. 12 of 2017 issued by the Foreign Exchange Department of CBSL, Electronic Fund Transfer Cards (EFTCs) such as debit and credit cards are not permitted to be used in payments related to virtual currency transactions.

This is not the first time Sri Lanka has warned against the use of cryptocurrencies. Similar statements came in 2018 and 2021, two periods that could not be more different from each other. 2018 saw the crypto space experience some of its most bearish conditions, with bitcoin dropping to around $3,500 per unit in November of that year after trading close to $20,000 just 11 months ago.

It’s the opposite of El Salvador

By contrast, 2021 is often referred to as the “Year of Cryptocurrency,” when prices were skyrocketing and space looked better and stronger than it was before. More crypto companies entered the fray, and the valuation of the space was on the verge of exceeding $3 trillion.

Sri Lanka is taking an opposite approach to countries like El Salvador, which was the first country in history to announce legal tender for bitcoin. The Central American country has long sought to wean itself off the US dollar, and leaders have felt Bitcoin is the perfect tool for doing so.

Tags: crypto, El Salvador, Sri Lanka

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