The Bank of the Lao PDR has urged market vendors in Luang Prabang to stop accepting Chinese yuan following the arrest of a Chinese national accused of using counterfeit currency in the popular tourist destination.

The suspect was apprehended on December 25, and an investigation is underway, expected to last at least two months. Vendors who believe they have received fake notes are encouraged to report their cases to the authorities.

Laos’ inflation crisis has driven many vendors to favor foreign currencies such as the Chinese yuan over the depreciating Lao kip. However, officials warn that this dependency has created opportunities for counterfeiters.

While some vendors remain cautious and only accept smaller yuan denominations they can verify, others were reportedly tempted by lower exchange rates offered by the suspect.

The central bank advises vendors to direct customers to exchange their foreign currency at official bank branches to minimize risks.

Luang Prabang, a UNESCO World Heritage Site, has seen increased Chinese investment and tourism following the launch of the China-Laos high-speed railway. Despite its economic benefits, the influx of foreign visitors has also brought challenges, including counterfeit currency circulation.

The Lao government continues to monitor the situation closely and urges vendors to prioritize financial security when handling foreign cash.