Sri Lanka government aims to develop a new regulatory framework on Digital Banking, Blockchain and Cryptocurrency Mining to boost economy.
The island nation aims to go digital with the introduction of blockchain technology and cryptocurrency mining. Sri Lanka is of the view that these new space can help it attract investments and investors.
Sri Lanka Regulatory Framework On Blockchain And Cryptocurrency Mining
Sri Lanka government forms a committee to study regulatory frameworks of other countries on blockchain and related industries. The government press release mentioned:
“Keeping in line with the National Policy Framework – Vistas of Prosperity and Splendor which highlights the importance and values of a technology-based society, Cabinet approved the proposal made by the Minister of Project Coordinating and Monitoring Namal Rajapaksa to appoint a committee to report to the Cabinet on the Acts, Rules and Regulations to attract investments and investors in the areas of Digital Banking, Blockchain & Blockchain related industries such as cryptocurrency.”
The necessity of developing an integrated system of digital banking, Blockchain and cryptocurrency mining technology has been identified to pace on par with the global partners in the region while expanding trade to the International markets, the Government Information Department said in a media release.
This committee will be mandated to study the regulations and initiatives of other countries such as Dubai, Malaysia, Philippines, EU, and Singapore etc., and propose a suitable framework for Sri Lanka.
The committee will also study the laws and regulations of other countries in terms of anti-money laundering, terrorism financing, criminal activities, and the Know Your Customer (KYC) processes.
The committee comprises experts from diverse domains: Sujeewa Mudalige (Chairman)- a Chartered Accountant; Sadun Hapugoda – Director Mastercard Sri Lanka & Maldives; D. Kumarathunge – Director, Payments & Settlements Central Bank of Sri Lanka; Jayantha Fernando – an expert on ICT legal and policy issues; and, Milinda Rajapaksha – expert on political and corporate communications strategy formulation.
Sri Lankan Economic Crisis
Sri Lanka is badly hit by the coronavirus pandemic. The island nation lifted an extended lockdown only this month while retaining curfew at night. Worsening health crisis and the subsequent restrictions have wrecked the key industries of Sri Lanka: Travel and Tourism. Tourism contributes around 12% of the Sri Lankan GDP.
Over the past few months, tourism sector has been badly hit. This has resulted in sharp decline in revenue, from more than $450 million a month two years ago, down to $2 million a month, according to the data from Trading Economics. Such a steep downfall has resulted in further deterioration of the forex reserves that are already at their lowest level since 2009.
The government is under tremendous pressure to bring investment and propel economic growth. Looking at the current state of blockchain and cryptocurrency market, it seems a wise decision to embrace this emerging technology to bring investment, generate employment, and fast track the economic recovery by providing favorable regulatory frameworks.