In a press conference held today, Sri Lanka’s Central Bank Governor, Nandalal Weerasinghe, reiterated his concerns over the use of cryptocurrencies, which are currently not accepted in the country.
“Cryptocurrency has been recognised in some markets as an asset class, but this asset class is highly volatile and risky. So, without proper regulation and supervision, do we need the public to invest in highly volatile and risky assets?” the Governor questioned.
Weerasinghe stated that the decision to allow or disallow the use of cryptocurrency as a payment means or as an asset class rests with the government. He emphasised the need for a proper regulatory mechanism and a regulatory authority like the Securities and Exchange Commission (SEC) to ensure transparency and prevent money laundering.
The Governor also pointed out the challenges posed by exchange controls in Sri Lanka, where there is no free movement of capital. “Then how do you prevent capital from moving in and out if you allow cryptocurrency? There are a lot of things to be looked at before any authority makes that decision,” he added.
This statement comes at a time when cryptocurrencies are gaining popularity worldwide. Sri Lankan President Ranil Wickremesinghe recently remarked, “Some young people are involved in cryptocurrency. They suggest relaxing regulations in this area to foster economic growth.”
This suggests that there is a growing debate within the country about the potential benefits and risks of cryptocurrencies, and how best to regulate them. For now, cryptocurrencies remain unaccepted in Sri Lanka, but the discussion around their regulation continues.