The Central Bank of Lao PDR has cautioned its citizens, investors and traders not to use digital assets as medium of exchange because it is unlawful to do so.
Regardless of being cautioned on publicizing digital assets on social media, digital assets like Bitcoin, Ethereum and Litecoin were still being posted on social media platforms which was deemed unlawful by the Central bank of Lao PDR. The Transaction System Management Department had earlier announced against the use of cryptocurrency exchanges as unlawful.
As stated by a specific publication at the Central Bank, in October last year. The department told the companies dealing with financial and monetary transactions composed of banks, investment dealers, trust and insurance companies to adhere to the specified rules in the publication.
The publication mentioned that there was no safety guaranteed in the use of digital assets as a medium of exchange due to lack of high standards of cyber security system to safeguard the client’s digital assets. This has been happening recently in most countries where hacking of cryptocurrencies has led to loss of digital assets of customers.
The agreement between the buyer and seller to exchange goods and services in cryptocurrency is decentralized, without a central bank or single administrator that is sent from user to user on peer to peer network without the need for intermediaries making it hard for authorities to manage them. This leads to financial criminal activities because money can be exchanged without being linked to a real identity.
Reports indicates that there are some groups posting use of digital assets as a medium of exchange through commercial banks attracting customers by claiming that they will earn money which is not genuine as affirmed by the authorities.
In the October publication, the central bank warned Financial Institutions of involving themselves in the use of cryptocurrency as a medium of exchange. A digital asset uses encryption techniques to control creation of monetary units and verify transfer of funds.
The use of cryptocurrency as a medium of exchange for their own gains through financial Institutions has been declared illegal by use of cryptocurrency as a means of exchange of goods and services, acting as intermediaries in the exchange among their customers and supporting their clients to invest in cryptocurrency.
Financial Institutions were cautioned to be watchful, by ensuring clients not to use their accounts in the transaction of cryptocurrency, be on the lookout for criminals using their personal information to post on social media on the use of cryptocurrency and to prohibit clients in using fake credit cards as a medium of exchange.