Mongolbank has joined its global counterparts to warn against the risks of cryptocurrencies.

The central bank on Thursday issued a warning on its website, highlighting the potential of cryptocurrencies to be used for illicit activities such as tax evasion, money laundering and terrorism financing.

“First of all let us state that the Bank of Mongolia does not consider cryptocurrency as a currency. It can not be a legitimate instrument of settlement. Banknotes can only be issued and printed only by Central Bankers. The currency of the Central Bank of Mongolia is guaranteed to be the currency,” President of Central Bank of Mongolia N.Bayartsaikhan said.

The central bank set up a working group to assess the risks posed by cryptocurrencies. On the basis of the study, it warned against the purchase of blockchain-based currencies for the purpose of investment.

“My advice is to exercise extreme caution and to carefully consider risks related to purchasing unregulated products such as cryptocurrencies. As the saying goes, "Measure seven times, Cut once". I advise you to invest in low-risk ventures that you know well,” he said (as translated by Montsame).

He concluded saying:

“If governments of other countries begin to tighten their regulations on usage of cryptocurrencies, there is a risk that its prices will plummet. The reason is if it is proven that transactions related to tax evasion, money laundering, terrorism financing are taking place using cryptocurrencies, there is a high chance that they would be banned. Mongolbank has previously expressed its stance on such matters.”