Sri Lanka Recognises the Potential of Cryptocurrency and Blockchain and Creates a Committee to Study Them

 

Sri Lanka Recognises the Potential of Cryptocurrency and Blockchain and Creates a Committee to Study Them

The government of Sri Lanka plans to expand the crypto mining space to attract foreign investors. Its Cabinet approved the formation of a new eight-member committee. Members of the said committee are banking sector officials and Fintech experts studying the rules and regulations that other nations have put in place regarding cryptocurrencies. Moreover, Sri Lanka will find methods to eliminate money laundering, terror financing, and other illicit activities. In addition, the said committee will learn Know-Your-Customer processes. 

In addition, this committee will observe the regulations set on crypto-industries in nations such as the European Union, Singapore, Philippines, Malaysia, and Dubai.

The Government Information Department announced that experts from both government units and private companies involve the following people, namely, Dharmasri Kumarathunge, director of payments and settlements at the Central Bank of Sri Lanka, Rajeeva Bandaranaike, CEO of the Colombo Stock Exchange, and Viraj Dayaratne, chairman of the Securities and Exchange Commission of Sri Lanka.

Other members include Sandun Hapugoda, director of Mastercard Sri Lanka, Jayantha Fernando, the Sri Lankan Data Protection Law Drafting Committee chairman, political activist Milinda Rajapaksha, and T.G.J. Amarasena, chief executive of the Sri Lanka Computer Emergency Readiness Team, and. Sujeewa Mudalige, managing partner of PwC Sri Lanka, will head the committee.

Cabinet member Namal Rajapaksa proposed the creation of the committee. His roles include state minister of Digital Technology and Enterprise Development of Sri Lanka, Minister for Sports and Youth Portfolio, and minister of Development Coordination and Monitoring. 

The Department of Government Information made a press release that the government's move is to draw foreign investments in these technologies as the government plans to upgrade its economy under "Vistas of Prosperity and Splendor," Sri Lanka's national policy framework. 

Sri Lanka needs to develop an integrated system of cryptocurrency mining, blockchain, and digital banking to keep abreast with the global partners in the region while broadening its scope of international trade. If you are interested in starting crypto trading platforms, pay a visit to the Bitcoin Evolution website. 

The committee is mandated to report its findings to the Cabinet of Acts, Rules, and Regulations. 

This development has spurred Sri Lanka to follow the crypto space expansion of other southern Asian nations like Pakistan, Vietnam, and India. 

In September, El Salvador has recently recognized bitcoin as a legal tender alongside its primary currency, the US dollar. 

Sri Lanka's Director-General of Government Information Mohan Samaranayake shared a letter that states the authorities' approval about a recent proposal that aims to entice foreign investments in the country's crypto and blockchain industry. 

Data from July 2020 to June 2021 exhibited a 706 percent rise in crypto transactions in Central and Southern Asia and Oceania. These regions obtained a 14 percent value of transactions ($572.5 billion), with India having the most significant value in global transactions. 

The central bank of Sri Lanka issued in April 2021 a public notice against the crypto investment risks. However, despite that warning, it turned a 180-degree turn when it listed three banks for creating a proof-of-concept for a shared Know Your Customer facility using blockchain. 

Crypto Growth Spurt in Sri Lanka

Several new investors are joining the first bitcoin investors in Sri Lanka. Different investors have their reasons for joining, like the hope of obtaining quick returns of investment. Others are affected by the effect of the pandemic and are searching for a better store of value. 

Sri Lanka has an unregulated crypto industry. However, foreign currency exchange laws prohibit the purchase of virtual assets using credit cards, which makes prospective investors find things challenging to buy cryptocurrencies. 

More Sri Lankans use closed social media groups or peer-to-peer (P2P) crypto trading platforms to buy crypto despite that concern. For example, Paxful, a P2P bitcoin trading platform, saw a 730% increase in trading volume from April 2020 to April 2021. 

Paxful director of communications Danny Stagg said that the first three months of trading in 2021 already have exceeded the total volume traded in 2021. This trend can also be seen in other markets such as Morocco and Brazil. 

With the ballooning interest in crypto, Sri Lanka has issued a public warning to its citizens regarding the risks involved in virtual currency investments. 

This article only serves to inform and not to provide legal advice. If you want to learn more about cryptocurrency and crypto trading, you can visit Bitcoin.n Evolution website listed earlier.