National Bank of Georgia to warn citizens regarding cryptocurrencies

National Bank of Georgia to warn citizens regarding cryptocurrencies

Lately, cryptocurrency industry has seen a surge in popularity of unprecedented levels. National Bank of Georgia would like to warn citizens on this matter.

“Cryptocurrencies do not represent means of legal payment in Georgia. Any sort of activity conducted within this sector is not regulated by legislature and therefore is not a sphere of influence of NBG.

Several externalities need to be taken into consideration with the cryptocurrency market:

  • Today’s cryptocurrencies are characterized by massive fluctuations in value, which are caused by speculative behavior. Therefore, due to their lack of stability, they present high financial risks for their customers. 
  • Virtual currencies do not have centralized managing bodies, which means that any issues/disputes between parties will be difficult to resolve.
  • Large portion of cryptocurrency trade is conducted through exchange platforms and digital wallets, which are based in many different countries. Legal status of such entities is, most of the time, ambiguous. Therefore, customers who use such entities for financial transactions risk both legal and financial complications. At the same time, such platforms are potential targets for cyber-attacks.
  • Anonymity of cryptocurrencies attracts illegal entities and activities like money laundering.

National Bank of Georgia calls for citizens to be cautious when dealing with cryptocurrencies and take the aforementioned points into consideration”, – claims NBG in its announcement.

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