Committee on digital currencies making progress on report

Sri-Lanka’s cabinet approved committee to instruct on regulations for digital banking, blockchain and cryptocurrency has progressed with its report and is now looking at prevailing practices in other countries including Singapore, Malaysia and Philippines, with a view to creating a regulatory framework for Sri Lanka.

“The committee needs to study other countries’ laws and regulations in relation to anti- money laundering, terrorism financing, criminal activities and KYC processes. It is a long-drawn out process. Some countries have partially approved while others have fully approved. They are studying to see which one of these options suits us best,” a source close to the committee said.

He added the committee is working on getting the regulatory framework sorted. “If they decide to go for enabling digital currencies the country needs an exchange to encash it. The exchange needs to be monitored and separate rules and regulations are needed for this,” he explained.

He added the committee is looking at how to stop black money from coming in or prevent money laundering while stopping the dollars from leaving the country.

“Also why a digital currency exchange should be set up here in Colombo is being explored.” “Whether to have taxes on cryptocurrencies and if a tax is to be implemented what sort of tax is also being discussed,” the source added. He said all these will be addressed in a report soon after which it will be sent for public consultation. Then it will need the banking regulator’s approval as well as a nod from the Cabinet.

The Central Bank (CB) in one of its road maps said the rising demand for digitalised financial services has created an opportunity for Sri Lanka to evaluate the possibility of adopting Blockchan Technology to further advance the country's financial sector.

Currently there are at least three different Internet platforms which allow buying and selling Bitcoin with five forms of payment.