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The Central Bank of Armenia (CBA) has issued a statement warning of cryptocurrency risks and urging the society, including legal entities to refrain from exchanging, trading and/or investing in cryptocurrencies.
Meanwhile, the Bank said the warning does not apply to cryptocurrency mining, which it said is outside its oversight and is seen as an IT industry.
The Bank said it closely follows the developments in the sphere and cited several factors that pose risks. It noted that cryptocurrencies are not backed by anything and are therefore extremely volatile.
The regulator added that the cryptocurrency deals may often be part of money laundering and terrorism financing schemes, as they allow for anonymous cross-border transactions, which are irreversible.
Besides, it said in cases of fraud and information security violations there are no legal mechanisms that would protect customer rights and refund the loss.
The CBA noted that international organizations such as the International Monetary Fund, the World Bank and other financial regulators have also issued warnings, describing cryptocurrencies as crypto assets, as they lack the features that would allow them to be considered a currency and be used as a means of payment.
Furthermore, the CBA noted, that many respectable international organizations have compared some cryptocurrency investments to Ponzi schemes, in which the rights of investors are not secured and they risk losing the whole investment.
The Central Bank called attention to the statement adopted during a recent G20 summit in Buenos Aires, in which the participants welcomed the technological innovation, but cited a number of cryptocurrency-related risks and urged organizations developing international standards to continue monitoring the cryptocurrencies and related risks.
The Armenian Central Bank said it remains committed to its stance on cryptocurrencies, which coincides with that of the above-mentioned international organizations.
