Serbia's Central Bank warns consumers against "virtual currency" such as Bitcoin, stating that digital currencies weren't backed by any Central Bank and that users weren't protected from trade-related risks.
"Bitcoin is a virtual currency. Virtual currency is a form of unregulated digital money that is neither issued nor backed by a central bank. [...] The value of bitcoin in exchange platforms is not guaranteed. In fact, it is rather volatile and driven by supply and demand."
The authority stated that, while digital currency exchange platforms can be registered as economic entities, they aren't regulated in a way that protects users from trade-related risks. Thus, consumers are not covered by any legal protection if the exchanges lose funds or fail.
The NBS noted that, according to the NBS Law the Serbian dinar was the country's legal tender, adding that "all cash liabilities arising from transactions concluded in the country are expressed in dinars and settled in dinar-denominated means of payment, unless stipulated otherwise by another law."
Further, the authority said that not only the NBS Law stipulates that transactions within the country had to be expressed in Serbian dinars; it also mentioned the Law on Payment Transactions, which "envisages that payment transactions are performed in dinars," as well as the Law on Foreign Exchange Operations, stating that "payments, collections and transfers among residents and between residents and non-residents are performed in dinars, or in foreign currencies in exceptional cases which are prescribed by the Law."
Thus, the authority said that given these elements, Bitcoin is not considered as a legal tender in the Republic of Serbia, and cannot be neither purchased nor sold by banks and licensed exchange dealers, reminding "anyone engaging in these or other activities involving virtual currencies does so at their own risk and responsibility."
Portugal's Bank Warns Against the Risks of Using ‘Virtual Coins’
Serbian Central Bank’s warning was likewise echoed by its Portuguese counterpart.
On October 3, Banco de Portugal (BdP) issued a warning letter to consumers, highlighting the numerous risks related to "virtual coins". This announcement came only a few days after Lisbon welcomed Portugal's first Bitcoin ATM, a machine locally created by Portuguese startup Bitcoin Já. Following its public launch, the Central Bank stated in its public announcement: "The [Bitcoin] ATM is not integrated in the Portuguese payment system."
Explicitly mentioning Bitcoin, the BdP said, "virtual currencies are not safe," explaining "entities that issue and sell 'virtual coins' are not supervised or regulated by any financial authority, national or European system."
The release noted that consumers bear all the risks, as there is no guarantee whether the "coins" are accepted as a mean of payment when purchasing goods or services. The Central Bank added there are no consumer’s legal protections that guaranteed the repayment of consumer rights "whereas conventional [transactions]."
Further, Banco de Portugal warned about the hacking risks, noting that whether the funds are stored online in an exchange platform or in cold storage, they are vulnerable to hackers. The authority added that "transactions in 'virtual currency' can still be misused in criminal activities, including money laundering."
The Central Bank mentioned former similar warnings that had been made by European authorities, including the European Central Bank's 2012 study "Virtual Currency Schemes", the European Banking Authority's 2013 Consumer Alert and the European Banking Authority's 2014 Opinion on "virtual currencies."