Bank of Laos Warns Public Against Use of Cryptocurrencies
The Bank of Laos (BOL) has issued a notice warning the public against the use of cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, which are unregulated currencies that are not tied to physical cash reserves.
The notice, dated 29 August, is addressed to traders, merchants and ordinary citizens alike, warning against the purchase and sale of cryptocurrencies. It warns of the risks of cryptocurrency, and urges Lao people to study the issue in depth prior to making any investment or purchase of such products.
According to the notice, the rate of global technological advancement is ever-increasing, including the use of Blockchain technology, which is used in electronic financial transactions and is the basis for the rise of cryptocurrency.
Some Lao businesses have already begun acceptance of payment for goods and services in cryptocurrencies, as well as advertising investment or trade in these digital monies.
The Bank of Laos states in its notice that in accordance with the Law on Payment Systems, No. 32/NA, dated 07 November 2017, cryptocurrencies are not real currencies and should not be used for payment of debt. This is because the cryptocurrencies do not meet the standards required for use as currency and are not currently regulated by any legislation in Laos.
Secondly, Lao people are urged to take precautions before making any investment or trade in cryptocurrencies because of the significant risk attached to them, such as its potential use in money laundering or the funding of terrorist activities.
Traders are also warned that the currency suffers severe price volatility, and may be offered as payment for fraudulent activities.
A source at the Bank of Laos told the Laotian Times in a telephone interview that while there is no regulation governing the use of cryptocurrencies in Laos, such currencies can not to be used as a legitimate form of payment, making them effectively illegal.