The National Bank of the Kyrgyz Republic, the central bank of Kyrgyzstan, has issued new statements confirming the use of bitcoin and other digital currencies as a form of payment is currently illegal under national law.
The document reads:
The central bank also moved to warn consumers about the potential risks associated with digital currency, confirming that no laws currently protect consumers who decide to purchase such assets.
"Virtual currency is regulated by no central government agency in the world, [...] and the lack of any [centralized institution] makes public or private regulation of system almost impossible," the document reads.
Echoing concerns raised by central banks internationally, the release characterized bitcoin as a risky asset that lacks sufficient security.
For example, the document noted that it is impossible for consumers to cancel transactions made in bitcoin once payment is transmitted, making the users susceptible to theft and scams.
The statements also took aim at bitcoin's price volatility, stating:
Although other countries have issued similar warnings, the Kyrgyz Republic's release may be notable in the tone it takes toward bitcoin use.
Building off its criticisms of bitcoin as an unstable payment tool, the government recommended that citizens "do not participate in the purchase, sale or exchange for other currencies or assets".
Doing so, the bank suggests, could also open digital currency users to legal liability, as the document states users "assume all the possible negative consequences of the possible violation of the legislation of the Kyrgyz Republic".
Data shows that the official Bitcoin-Qt wallet has only been downloaded around 1,000 times in the central Asian nation with a population just shy of 6 million, suggesting local digital currency use is not widespread.
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