Investors of digital currencies in SL face risk: Deputy Minister

By Yohan Perera  

Those who invest in digital currencies in Sri Lanka are at risk as such activities are not formally legalized or supported in Sri Lanka, Deputy Minister of Finance Anil Jayantha told Parliament yesterday.   

“Pursuant to section 47(1) of Central Bank of Sri Lanka Act No 16 of 23, Sri Lankan rupee is the legal tender in Sri Lanka. Accordingly, digital currencies such as crypto currency or any other digital and virtual currencies are not accepted as a payment in Sri Lanka. Similarly, crypto assets are not recognized in Sri Lanka as an asset class or financial instrument. The Central Bank of Sri Lanka has not licensed or authorized any crypto currency trading platforms , digital asset exchanges, mining operations or related service providers to operate within the country. With regard to crypto currency trading, currently within Sri Lanka such activities are neither formally legalized nor supported, and occur outside the regulated financial system, without regulatory oversight, investor protection, or legal safeguards. Participation in crypto currency trading is therefore undertaken entirely at the individual’s own risk. Crypto currency exchanges are not licensed or supervised by any domestic regulatory authority in Sri Lanka,” the Deputy Minister said in response to questions raised by MP Ravi Karunanayake in the House.   

Asked about the supervisory measures taken by the Central Bank, the Deputy Minister said press releases have been released a few times warning the general public of the risks associated with use of digital and virtual currencies.   

It was further revealed that residents are not permitted to invest in crypto assets by converting Sri Lankan rupees into foreign exchange or by electronic fund transfer cards. The debit or credit cards prohibited from being used for payments in relation to virtual currency transactions.   

Also the Deputy Minister said the National Coordinating Committee on National Anti-Money Laundering and Countering Financing of Terrorism is working on a time bound plan addressing policy preparation, mandatory registration , asset class and taxation and full licensing.