The Central Bank of Sri Lanka (CBSL) announced that Virtual Currencies including Blockchain-based Cryptocurrencies will remain unregulated in Sri Lanka with no regulatory oversight or safeguards relating to their usage in Sri Lanka despite the recent surge in Cryptocurrencies in the country due to the sharp depreciation of the Rupee and high inflation.
“VCs are considered as unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage in Sri Lanka,” it said.
As informed to the public previously by CBSL through press releases in 2018 and 2021, CBSL said that it has not given any license or authorization to any entity or company to operate schemes involving VCs, including cryptocurrencies, and has not authorized any Initial Coin Offerings (ICO), mining operations or Virtual Currency Exchanges.
Furthermore, as per the Directions, No. 03 of 2021 under Foreign Exchange Act, No. 12 of 2017 issued by the Department of Foreign Exchange of CBSL, Electronic Fund Transfer Cards (EFTCs) such as debit cards and credit cards are not permitted to be used for payments related to virtual currency transactions.
Therefore, the CBSL stressed that VCs are unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage in Sri Lanka.
It warned the public of the possible exposure to significant financial, operational, legal, and security-related risks as well as customer protection concerns posed to the users by investments in VCs. The public is also warned not to fall prey to various types of VC schemes offered through the Internet as well as other forms of media.