Laos Central Bank Wary of Cryptocurrencies’ Use in Money Laundering
The central bank of Laos has warned commercial banks, financial institutions, and investors not to buy, sell or use cryptocurrencies, reports local media outlet Vientiane Times, May 21, 2019.
Laos Does Not Want Cryptocurrencies
Laos’ central bank, the Bank of the Lao People’s Democratic Republic (PDR), has cautioned financial market players against digital currency transactions as they are not legal in the country. The warning comes after the central bank’s Transaction System Management Department learned that despite the existing crypto ban in the country, social media platforms have been advertising the use of cryptocurrencies like bitcoin (BTC), ether (ETH), and litecoin (LTC), among others.
Per sources close to the matter, the Transaction System Management Department has asked financial institutions and banks under the central bank to “strictly observe” the October 2018 announcement which bars them from dealing in cryptocurrencies.
At present, there are no regulations or laws in place in the country to protect customers from scams, frauds, and other illicit activities schemed by corrupt crypto businesses. According to the report, the central bank is especially concerned about the anonymous nature of crypto transactions which it believes increases the risk of use of digital currencies in money laundering.
The central bank has also asked people to stay away from tempting schemes which solicit investment in cryptocurrencies. The report reads in part:
“According to the source, some groups are advertising the purchase, sale, and use of cryptocurrencies for money transactions through commercial banks, enticed by claims that this will generate income in some way – a claim that the authorities say is untrue.”
Contrasting Stance Towards Crypto in Asia
Asian countries seem to be divided in their outlook towards cryptocurrencies.
China put a ban on initial coin offerings (ICOs) and barred banks and people from participating in crypto activities in 2017. The ban which is still in effect has, over time, forced many crypto businesses to move their operations to more pro-crypto countries. Similarly, recent reports suggest that India is also considering putting a blanket ban on cryptocurrencies despite the pro-crypto communities lobbying hard against it.
In contrast, countries like Japan, South Korea, and Thailand have made considerable efforts to develop a cohesive ecosystem to encourage crypto ventures while at the same time also ensuring the safety of investors.