Lankan financial system to be further integrated with blockchain

Sri Lanka’s financial sector will be further integrated with blockchain technology this year, while further studies on financial technology (fintech) will be conducted by the Central Bank, which has so far taken a more conservative approach towards such disruptive technology.

“As blockchain technology plays an important role to change the entire current financial transaction infrastructure within a digital eco system, the integration of distributed ledger systems into financial institutions and services will be facilitated in line with the regulations in the country,” Central Bank Governor Dr. Indrajit Coomaraswamy said.

Blockchain reduces the space for fraud in financial transactions, with each computing device involved in a transaction checking the network for the authenticity of each block of data transacted.

The technology was initially developed for the digital currency Bitcoin, which is currency valued at over US$ 14,500, compared to just US$ 0.25 in 2010. The entire Bitcoin market capitalization is currently US$ 248 billion.

Dr. Coomaraswamy said that the Central Bank will also be conducting a study on such digital currencies this year.

“With the increasing global popularity of digital currencies, the Central Bank intends to carry out a study in order to determine the effects of a digital fiat currency on the current economic landscape of the country,” he said.