The statement comes after the central bank of Kazakhstan reported last week it’s inspecting the crypto market while saying that it’s too soon to discuss the legalization of cryptocurrencies like Bitcoin and Ethereum.
Cryptocurrencies and other virtual assets are progressively spreading in Kyrgyzstan, the country’s central bank recently noted. The regulator reminded that utilizing them to trade goods and services is still illegal, with the Kyrgyzstani som staying the main legal tender in the country.
A warning by the Kyrgyzstani authorities was also issued regarding the risk related to cryptocurrencies. The bank claims that it has no real value since it is not pegged to another currency or any other asset.
The National Bank of Kyrgyzstan (NBK) stated that digital assets create high risks of exchange rate volatility and loss of value. The central bank was also worried about settlements in cryptocurrency and the absence of a “central body.”
“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.”
After China started cracking down on the industry in May 2021, crypto businesses had their eyes on these Central Asian countries. However, both nations have been trying to limit mining activities in their respective countries by raising electricity rates for authorized mining enterprises and shutting down illegal crypto farms. These crypto farms have been blamed for creating energy shortages and blackouts.