Sri Lanka Forms Committee To Supervise Blockchain and Cryptocurrency

The Sri Lankan government has appointed a new committee with eight members. Fintech experts and officials from the banking sector have been roped-in as part of the newly formed committed. As part of their research, the committee members will be observing the rules and regulations put in-place by other nations that are supporting cryptocurrencies. In terms of concerns, Sri Lanka will be exploring ways to reduce risks of crypto misuse in terror financing, money laundering, and other criminal activities.


Section 1: Sri Lanka Forms Committee To Supervise Blockchain and Cryptocurrency


Last month, President Maithripala Sirisena signed the Preamble of the Sri Lanka (Blockchain and Cryptocurrency) Act, 2018. The law came into effect from November 15 and allows cryptocurrency holders the same tax benefits as other asset holders. It also imposes taxes on transactions for cryptocurrencies like bitcoin.


The Sri Lankan government has also introduced a committee to oversee cryptocurrencies and provide recommendations to amend the existing law to provide for the establishment of a regulatory body. The committee is headed by Wijith Wijayaratne. It includes S.


Benefits of blockchain technology


Blockchain technology is revolutionizing the world of finance, banking and foreign exchange. Its ability to reduce frauds, transfer funds with the click of a button, enhance cross-border payments, reduce cost, time, and ensure compliance is exciting to watch. Also, its ability to reduce transaction costs is impressive and will certainly attract more countries to adopt this technology. It will, of course, create jobs, improve the economy and help the citizens of Sri Lanka.


Other benefits of blockchain technology are immutability, security, high speed, transparency and trust.


At present, there is a huge demand for blockchain technology in Sri Lanka. Sathakita, an investment bank, announced last week that it will launch its crypto trading trading platform next month.


Sri Lankan government appoints a new committee to supervise blockchain and cryptocurrency


The government had earlier declared cryptocurrencies to be illegal and clarified that crypto trading is not legal in Sri Lanka. The government said that cryptocurrencies have the potential to be misused by terrorists, criminals and investors. However, recent developments in the crypto sector such as the emergence of alternative blockchain-based coins like Bitcoin Cash and Litecoin, have led to speculation on legalisation of digital currencies in the country. The growing awareness about cryptocurrencies and their impact on international financial transactions has helped the country to form a committee on this matter.


Concerns of crypto misuse


Back in 2016, Sri Lanka's former central bank chief Arjuna Mahendran warned that cryptocurrencies, such as Bitcoin, are highly prone to fraud. He also pointed out that the international money transfer system was vulnerable to attacks, which could be carried out by a cyber terrorist or a terrorist group, particularly in the context of cross-border money laundering.


While he called for regulations in the country, the government has expressed caution on the matter of cryptocurrencies.


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