Dominican Republic cenbank issues cryptocurrencies warning

The Dominican Republic's central bank (BCRD) issued a statement clarifying its position on cryptocurrencies, becoming the latest nation in Latin America and the Caribbean to warn against the use of cryptocurrencies.

In a statement, central bank governor Héctor Valdez Albizu, said, "Virtual assets like Bitcoin, Litecoin, Ethereum, among others, do not have any backing from the BCRD, and as such, do not enjoy legal protections provided within the legal framework of the Dominican Republic."

The central banker's comments follow instructions given to financial agents after the monetary policy board's June 22 meeting, to educate the sector on the risks associated with cryptocurrencies.

The governor stressed that the Dominican peso is the only official national currency and that the central bank is the sole issuer of currency in the country.

Valdez Albizu said, "the virtual assets mentioned are not legal tender and, by themselves ... their use as a means of payment in our economy can not be guaranteed, nor any person is obliged to accept them as a means of payment for goods or services rendered."

Acknowledging the growing presence of cryptocurrencies in the media, Valdez Albizu stressed such assets are not be considered as foreign currencies under the exchange regime, "since they are not issued and are not under the control of any other foreign central bank."

The comments echo recent policy statements on cryptocurrencies in other nations in the region. These include a similar announcement from Colombia's financial sector regulator, stressing that Bitcoin and others are not protected by law or backed by the central bank.

Bolivia has gone further, making use or circulation of virtual currencies criminal. The Andean nation is cracking down on social events that promote the use of Bitcoin and other cryptocurrencies, where authorities claim many are drawn into pyramid-like schemes or otherwise swindled out of savings.

Mexico appears to be taking a more moderate approach. Central bank governor Agustín Carstens has said the monetary authority is studying the use of Bitcoin and other virtual assets. He has pointed out that the bank is approaching any formal adoption of the currencies with great care to determine the best course forward.