The Committee will examine the legal frameworks of other countries before making a proposal for the most effective framework for Sri Lanka.
The Government of Sri Lanka announced in a press release on Friday that it has approved the creation of an eight-member committee to deal with the regulations governing digital assets in other countries. In particular, the Department of Government Information (DGI) highlighted the European Union, Dubai, Malaysia and the Philippines as some of the examples to be studied to understand how blockchain technology can be handled.
The establishment of the Committee is in line with Sri Lanka’s National Policy Framework, which stresses the importance of building a technology-based community. The country intends to use the results of the study to bridge the gap between the South Asian country and some of its partners.
“The need to develop an integrated system for digital banking, blockchain and cryptocurrency mining has been recognized to compete with global partners in the region while expanding trade to international markets”, according to the press release.
In addition to figuring out how to keep up with the rest of its partners in terms of crypto, digital assets and mining, the committee aims to investigate aspects of protecting clients from criminal activity. These include Know Your Customer (KYC) procedures, anti–money laundering (AML), terrorist financing and crime related to digital assets.
The committee is composed of eight people representing different perspectives as they hold important positions in different organizations. Mastercard’s director in Sri Lanka and Maldives, Sandun Hapugoda, and Sujeewa Mudalige, managing Partner at PricewaterhouseCoopers Sri Lanka, are some of the standout names on this committee.
Sri Lanka’s stance on blockchain technology has not yet been fully defined. With the establishment of a committee to do just that, the country could easily attract investors to its cryptocurrency sector. In addition, the need for cryptocurrencies is growing, as many segments of the population are warming to digital assets.
A recent report by Chainalysis shows that the regions of South and Central Asia and Oceania recorded significant numbers in the adoption of cryptocurrencies. The Chainalysis report noted a 706% increase in the region, adding that Asian countries are leading in the adoption of cryptocurrencies compared to the European region, which is leading in transaction value.
The government of Sri Lanka has been anything but positive about cryptocurrencies. The country’s central bank issued a warning about crypto investments in April. She cited the lack of clear regulation, the volatility associated with crypto, and the role of cryptocurrencies in criminal activities ranging from terrorism to financial crime as reasons.