MONGOL BANK GOVERNOR WARNS INVESTORS ABOUT RISKS OF CRYPTOCURRENCIES
Governor of Mongol Bank N.Bayartsaikhan recently established a working group to assess the risks of investing in cryptocurrencies. After a careful evaluation of the information from the working group, N.Bayartsaikhan issued a warning to the public about the risks of investing in cryptocurrencies.
The warning, published on the central bank’s website, highlighted the potential use of cryptocurrencies for illicit activities such as tax evasion, money laundering and terrorism financing.
“The fact that many people are purchasing cryptocurrencies using their wages, pension, and loans using their belongings as collateral has been a major source of distress and dismay for me,” said N.Bayartsaikhan.
A cryptocurrency is an electronic payment system that has no central regulation and is not overseen by any central bank and operates autonomously.
“First and foremost, Mongol Bank does not recognize any kind of cryptocurrency as a currency. Cryptocurrency cannot be considered a legal means of payment. Only central banks hold the right to print the national banknotes. The national currency which is recognized as a legal tender by the Central Bank of Mongolia is the tugrug.”
N.Bayartsaikhan advised potential investors in cryptocurrencies to “exercise extreme caution and carefully consider risks” related to purchasing unregulated products such as cryptocurrencies. “As the saying goes, ‘measure seven times, cut once’. I advise you to invest in low-risk ventures that you know well,” he said.
The governor added that if governments of countries around the world start to tighten their regulations on the usage of cryptocurrencies, there is a risk that prices of cryptocurrencies such as bitcoin will plummet.
N.Bayartsaikhan concluded that it has been proven that transactions relating to tax evasion, money laundering, and terrorism financing are done using cryptocurrencies. Therefore it has a high probability of being banned in the future.