BASSETERRE, St Kitts, Thursday July 5, 2018 – The Eastern Caribbean Central Bank (ECCB) and the Financial Services Regulatory Commission (FSRC) of St Kitts and Nevis have issued a warning to residents that a Bitcoin ATM that has been installed in the country has not been authorized by regulators.
The ATM was set up at in Frigate Bay in June, and ECCB says it understands that there are plans for the installation of similar machines in other locations in the twin-island federation.
But in an advisory issued today, the ECCB said: “The public is hereby cautioned that the operation of Bitcoin ATMs or any other sort of cryptocurrency operations is not currently regulated by the ECCB, the FSRC St Kitts and Nevis or by any regulatory authority in the Eastern Caribbean Currency Union (ECCU). In addition, Bitcoin or any issuer of Bitcoin has not been designated under the Payment System Act in St Kitts and Nevis.”
“This means that there are no existing regulations to specifically protect consumers from financial losses if an organization that exchanges or holds virtual currencies fails or goes out of business.”
In essence, the ECCB said, anyone who chooses to use these services do so “completely at their own risk”.
“The extent of this risk, at this point in time, is not fully known given the novelty of the area and the absence of regulatory oversight,” it said.
The statement added that while the ECCB and the FSRC recognize that financial innovation is essential, the appropriate legal and regulatory framework is necessary to protect the integrity of the financial system and investors and consumers alike.
“At this stage, the ECCB, as a regional regulator, is pressing ahead with its work to advise the Governments of the ECCU on an appropriate regional framework for FinTech regulation and supervision as well as a strategy to reduce the use of cash to help boost growth and competitiveness,” it said.
The ECCB had issued an advisory on June 5, encouraging consumers to be cautious in their involvement in cryptocurrency operations.