The Central Bank of Cyprus (CBC) issued a warning on Friday regarding digital currencies, such as Bitcoin or any other form of virtual currency that is not legal tender.
The CBC underlined that there were no specific regulatory protection measures to cover losses for the users of virtual currencies if the platform that exchanges and deals in that specific currency collapses.
“There is no guarantee or legal obligation to reimburse at face value virtual currency owners, nor to reimburse them at any time. The price of virtual currencies is subject to high volatility. It may rise sharply or even fall to zero value. Acceptance of virtual currencies by merchants is based on their discretion and may cease to exist at any point and with no prior notice, in other words, any merchant may refuse to accept it for payments. Transactions in virtual currencies are more liable to be misused for illegal activities,” said CBC officials, urging the public to look into all risks associated with the use of virtual currencies.