Lao central bank warns public to avoid using cryptocurrencies

VIENTIANE (Vientiane Times/ANN) - The Bank of the Lao PDR (BOL) last week issued a notice warning members of the public to be on high alert and avoid falling victim to the use of cryptocurrency.  

The notice said the public is warned against the use of cryptocurrencies including Bitcoin, Ethereum and Litecoin, and other unregulated currencies.

It stated that some advertisements have appeared trying to convince people to purchase, sell and use cryptocurrencies in Laos.

Technically, a cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.

A senior BOL official, who asked not be named, told Vientiane Times that a cryptocurrency was a digital currency created by a group of people as a medium of exchange and for various financial activities.

“It is not real currency like Lao kip or Thai baht, because it is unable to pay debt. It is a digital record of a transaction. It is not yet regulated by law. People who get involved in the use of cryptocurrencies are taking risks if the digital system fails,” she said.

She said there was no organisation or sector to govern the use of cryptocurrencies but this notice would be helpful in warning members of the public about risky financial procedures.

“We can’t make any direct statements about discontinuing the operation of these electronic financial transactions because there is no legitimate form of law to regulate it,” she said.

According to BOL, the notice was intended to caution Lao people prior to investing or trading in cryptocurrencies because of the potential risk.

In addition, it is intended to prevent members of the public from getting involved in money laundering, the funding of terrorism and other harmful activities.

The central bank urges everyone to think carefully before purchasing or selling cryptocurrencies.

Precisely, a cryptocurrency refers to a digital coin that runs on a blockchain. The first major application of blockchain technology was bitcoin, which was released in 2009. Bitcoin is a cryptocurrency and the blockchain is the technology that underpins it.

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