535
views

Banks in Sri Lanka Sustain Crypto Ban Despite Worsening Economy

The Central Bank of Sri Lanka says crypto poses too much legal and financial security risk.

 

In a public release this Tuesday, the Central Bank of Sri Lanka (CBSL) has once more retained its anti-crypto stand. It publicly warned Sri Lankans that the government does not consider digital currencies a viable investment option. The release stated that the central bank has no regulations to protect crypto investors in place. Furthermore, the government had not authorized any exchanges to operate in the country and crypto remains banned in Sri Lanka.

Despite Inflation, Sri Lanka Refuses Virtual Currencies

The South Asian country’s food inflation rose over 50% in the last month, with major sources of revenue like its clothing and tea industries experiencing a major shaking. Only last week Saturday, tens of thousands of Sri Lankans protested against the government, marching and successfully invading the presidential palace.

As a result, some fronts have considered crypto as a potential source of resuscitating the economy, including crypto influencers like Tron’s Justin Sun. 

Sri Lanka is officially on DAO mode. I have some great ideas on how to get Sri Lanka out of bankruptcy and into prosperity with Web3 as a solution,” the Tron CEO offered

However, the nation’s central bank remains firm on its decision to steer clear of a sector it considers largely volatile.

2018 Anti-Crypto Decision Remains Firm

CBSL had earlier rejected digital assets first in 2018 and then in 2021 for security reasons. For one, the Sri Lankan cited the largely decentralized and unregulated nature of virtual currencies (VCs) as a red flag. According to the bank, should a dispute arise over the assets, there is no recourse for resolution.

Other reasons the bank gave were the volatility of the cryptocurrency market and its susceptibility as a tool for financial criminals.

As interest continues to increase both domestically and globally, CBSL saw fit to reiterate its stand on the asset. Consequently, the public release warned Sri Lankans on Tuesday that it has not changed its stand on digital currency.  The bank further announced that CBSL has not authorized any exchange or company to engage in schemes involving cryptocurrency. 

Additionally, CBSL disclaimed that it has not sanctioned any initial coin offerings (ICOs) nor authorized mining operations.

CBSL Prohibits Crypto Card Transactions

Finally, the central bank reminded the public of the CBS foreign exchange policy that bans EFTCs from making any transactions related to virtual currency. The release, therefore, warned the public to beware of virtual currencies due to the financial, and legal risks they pose. 

Although Sri Lanka’s economy continues to experience inflation upheaval, the south Asian nation remains determined to avoid assets it still considers highly volatile.

Bitcoin live price
Btc
Bitcoin
$21.486
price
7.68695%
price change
BUY NOW

In the past, countries like El Salvador and the Central African Republic have turned to crypto to navigate inflating economies. Only recently, El Salvador added extra 80 BTCs to its coffers, banking on a future BTC rise.

Stay up to date with our latest articles