Crypto Regulations in Sri Lanka

The crypto industry remains unregulated in Sri Lanka, although purchasing virtual assets using credit cards is prohibited under foreign currency exchange laws, making it difficult for prospective investors to purchase cryptocurrencies. 

Source: CoinDesk

The Central Bank of Sri Lanka has published a warning notice about the risks associated with cryptocurrency as interest and trading volumes of bitcoin and other cryptocurrencies surge locally and globally.

Source: News Bitcoin

The Central Bank of Sri Lanka has published a notice regarding cryptocurrency. “Considering the recent inquiries on the virtual currency used in the international and domestic markets, the Central Bank of Sri Lanka (CBSL) wishes to inform the public of the risks associated with investing in virtual currencies,” the notice published Friday reads.

Source: Crypto News

The Sri Lankan central bank also pointed out “Violation Of Foreign Exchange Regulations.” It detailed that as cryptocurrencies are traded as assets in exchanges, purchasing them from abroad would lead to a violation of Foreign Exchange Regulations,

Source: Coinspectator

Sri Lanka joins the global crypto adaptation drive! Only a month after Sri lanka’s central financial institution issued a public discovery of the dangers of cryptocurrency investments. The South Asian country seems to be dancing to a new tune

Source: Watcher.Guru

The government of Sri Lanka announced on Friday via a press release that it had approved the creation of an eight-person committee tasked with looking into the regulations around digital assets in other countries. The Department of Government Information (DGI) specifically highlighted the European Union, Dubai, Malaysia, and the Philippines as some of the sample cases that would be studied to understand how blockchain technology can be handled.

Source: Coin Journal

Asset BPO is a Sri Lanka based company, which is global business process outsourcing (BPO) management consortium and solutions provider. Asset BPO specializes in Business Process Management and Knowledge Process Management services in key areas of office space & Co-working outsourcing, Software & IT infrastructure development, Accounting & Finance, Business Research, Network infrastructure management, staff outsourcing & Back-office services. 

Source: Sri Lanka Business

“The ‘National Strategy on Blockchain’ is a very important milestone for any country. It should accelerate the move in the direction towards enabling trusted digital platforms creating a Blockchain framework for the development of applications based on this technology. The world is moving ahead, it’s time to collaborate & accelerate this journey towards education, research, government and industry adoption” added Prasanna Lohar, while addressing the topic of ‘A national strategy for Blockchain.

Source: Island. lk

According to new Global Trends research by Cullen International, most of the surveyed countries do not apply direct taxes on the digital economy, while they all applicable value added tax (VAT) on the digital economy.

Source: Cullen

The outcomes of the digitalization efforts of the committee over the last 3 months in Phase 1 are outlined in the table below that will create a strong digital infrastructure to ensure growth, access, education, and content distribution that will move the market into a robust and efficient stock market system.

Source: sec.gov.lk

The webinar featured cross-industry panelists including, Sanjay Mendis- Chief Innovation Officer of Bridge Advisory and Consulting, Peter Hofmann- CEO, Custodigit AG, Switzerland, Kavin Phongapandecha- CEO/Co-Founder of Bitazza, Dr. Amal Illesinghe. Chief Information Officer- National Savings Bank, Prasanna Lohar- Vice President- Technology of DCB Bank Limited, Venkatesh Hariharan- Representative of Open Invention Network, Satish Mohan- Chief Technology Officer- Dhiway Networks Private Limited, Dr. Prasad Samarasinghe- FITIS Chairman and Imran Vilcassim who moderated the session.

Source: Island.lk

It is true that Sri Lankans are interested in investing in Cryptocurrencies. However, currently, they suffer from an unclear future with an unsatisfied economy and politics. As an Adaption, data from local Cryptocurrency exchanges shows that the number of investors is increasing day by day. According to Binance, the most popular trading platform in Sri Lanka, they have experienced a huge increase in individual investors on their platforms since 2020. They recently had seen a rise of new investors with small buying capabilities just days before Bitcoin’s value decreased $50,000 for the first time in three months.

Source: VPS Fix

The global adoption rate of crypto has been shooting across the sky and Sri Lanka did not want to be left behind. The country hoped on to the crypto wagon and its latest initiative made it clear that it was interested in the industry.

Source: Tron Weekly

Sri Lanka’s interest in crypto has ballooned to such an extent that, in April, the country’s central bank (CBSL) published a warning, alerting the public of the risks involved in virtual currency investments for the second time in the last three years. 

Source: Crypto News

“Sri Lanka is taking a leap forward today as the cabinet approves to establish a committee proposes policy on BlockChain Technology, Digital Banking & Crypto Mining,” reads one tweet from the Minister of Development Coordination and Monitoring, and the State Minister of Digital Technology and Enterprise Development, Namal Rajapaksa.

Source: readme.lk

Microsoft has published its annual security report, which talks about the latest cybersecurity threats in the world. In its findings, Microsoft notes that India and Sri Lanka are five times more likely to experience crypto mining hacks, even though the number of such attacks has decreased by 34% from the previous year of 2018-19, notes Microsoft.

Source: Crypto Briefing

In a crypto mining attack, an attacker injects malicious software into a user’s or an organization’s machine and then uses the machine’s computational power to mine cryptocurrencies. This crypto hack causes a decrease in performance and an increase in utility costs. Since the malicious software is difficult to detect, the attacker can potentially cause more damage.

Source: Coin Market Trade

According to Sri Lanka Computer Emergency Readiness Team (CERT), the number of cybercrimes in Sri Lanka has increased to 8255 in just one year, from 2019 to 2020 which is almost three times more compared to last year’s data. The distribution of these crimes looks more interesting. Particularly, among them, more than 97% were related to social media, such as creating fake profiles and pretending to be someone else. But also, there have been financial frauds using emails, abuse, and privacy violation using phone hacking methods and also, phishing and ransomware attacks, which are nowadays’ trends the hackers. 

Source: cryptodaily.co.uk

According to research by the Consultative Group to Assist the Poor (CGAP), a regulatory sandbox requires adequate resources (staff and funding) to operate. However, CGAP has observed that often time’s regulators put sandbox responsibilities at the top of their staff’s existing work, instead of hiring dedicated staff. This results in further stretching of capacity and may have a negative impact on other areas of the regulator’s responsibilities such as regulation, monitoring, and supervision.

Source: Lanka Business Online

ECONOMYNEXT – Sri Lanka’s central bank has unveiled a regulatory sandbox to run innovative fintech experiments which can be released to the market after testing and gaining approval, Central Bank officials said.

Source: Economy Next

The central bank is calling on all relevant stakeholders involved in fintech innovations at entrepreneurial, academic, investor, government, non-government, and multi-lateral agency levels, including banks, non-bank financial institutions, and incorporated entities to share their views on this initiative.

Source: Fintech Futures