Sri Lanka has warned against the use of cryptocurrency, which it said is ‘largely unregulated’ amid an ongoing political chaos in country, according to TechCrunch . The country’s central bank, CBSL, said it does not consider cryptocurrencies as legal tender in the country and reminded that it has not given license or other authorisation to any entity to operate in the nation.

Citing its previous warnings released in 2018 and 2021, the central bank said it had also not authorised any initial coin offerings (ICO) or mining operations and virtual currency exchanges in the nation. Virtual currencies are considered as ‘unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage’ in the country. The warning comes at a time when the sovereign-debt crisis has crippled the local economy.

The South Asian nation, which fell into default in May 2022 and is struggling to secure essential imports from other nations, reported that inflation had touched a year-on-year record of 54.6 percent in June 2022. The total market value of final goods and services, which is measured through the gross domestic product (GDP) standard, also contracted 1.

6 percent in the first quarter of 2022. The falling value of local currency has prompted many Sri Lankans to invest in cryptocurrencies.