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Slovenia's financial watchdog warns about virtual currency risks

LJUBLJANA (Reuters) - Slovenia's financial watchdog issued a warning on Monday that virtual currencies - such as bitcoin - are not regulated and are not guaranteed by the central bank or any other state body.

The Financial Stability Board, which is affiliated with the central bank, said interest in virtual currencies from the public had lately increased "very much" and particularly as an investment opportunity. It gave no further details.

"Investors in virtual currencies ... have to take into consideration whether risks are in line with their personal preferences and investment goals," the board said in a statement.

Bitcoin, for example, enables individuals to transfer value to each other and pay for goods and services bypassing banks and the mainstream financial system.

Last month, European Central Bank President Mario Draghi criticized a proposal by the Estonian government to launch a state-managed digital currency, saying the euro was the only valid money in the euro area.

Estonia became the first European country to openly discuss the prospect of a digital currency managed by the government and offered to the country's more than 20,000 e-residents - foreign entrepreneurs who open a firm in the country via the web.

The Financial Stability Board, which consists of representatives of various government bodies, is headed by the Bank of Slovenia Governor Bostjan Jazbec, who also sits on the ECB's governing council.

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