It’s Official, Laos Doubles Down on Crypto-Ban in Recent Announcementby Fintechnews Singapore May 27, 2019
The Central Bank of Laos has officially cracked down on cryptocurrency in the republic. The Bank of Lao PDR has warned everyone from commercial banks and businesses to your average Laotian against buy, selling or using cryptocurrency for money transactions, according to Vientiane Times.
The central bank further called on banks and other financial institutions in the country to strictly observe an announcement they issued last October, decreeing a wholesale ban on the use of cryptocurrencies. No financial institutions are allowed to posess, engage in or encourage cryptocurrency transactions, according to the announcement last October.
The warning came in response to the central bank’s recent knowledge that cryptocurrency continues to be advertised on social media despite the central bank’s definitive crackdown on them. There is no security system in place to protect its citizens from any fraud or misconduct. Laos opines that it is difficult for the authorities to manage the use of these currencies, as transactions can be done in anonymity, which the central bank sees as an a risk in money laundering.
Some central banks think that the money laundering risk can be mitigated by instating eKYC regulations, but Laos deems it wiser to simply remove that element altogether from the local ecosystem.
The authority further stated that any claims of cryptocurrency purchasing and sale via commercial banks to generate income is false.
Banks were told to be vigilant in ensuring that customers do not use their accounts for any cryptocurrency transactions, and to keep an eye out of any fraudsters using the bank’s names and logos to advertise cryptocurrencies. Bank customers are prohibited from using any type of bank card, like credit and debit cards, for the purchase of cryptocurrencies.
The Laotian crackdown is no doubt disappointing to enthusiasts in the region, but it’s not hard to see why Laos deems this move necessary. Cryptocurrency thefts, scams and fraud could tally more than US$1.2 billion in just the first quarter of 2019, according to a report by CypherTrace. Cryptocurrency’s rise and fall over the years has been continuously punctuated by crypto-hacks too, even as recently as earlier this month with Binance.
We are expecting a heavier hand on upholding the ban to hit the ecosystem in Laos, following the announcement.
Laos has a lot of company in its decision. In July last year, Vietnam’s State Securities Commission (SSC) required companies and funds to refrain from any activity associated with cryptocurrencies, be it in transaction, issuance or brokerage. This year, China slammed a big hammer on what was once a lucrative cryptocurrency mining scene, which was bolstered by local access to technology, following smaller crackdowns on fundraising activity like ICOs. Bolivia, Columbia and Ecuador have also banned the use of Bitcoin and other cryptocurrencies.
Featured image via Wikimedia Commons