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Tuesday September 26th, 2023

Sri Lanka cryptocurrency users should take own risk: CB officials

ECONOMYNEXT – Sri Lanka’s central bank has not yet approved cryptocurrencies for transactions and those who use them for transactions should bear the risks of any eventualities, officials said.

Sri Lanka’s cabinet of ministers appointed a committee to look into blockchain and cryptocurrency use in the country.

Blockchain is a tool to transact via electronic means, which can also be used for central bank money, but crypto currencies are electronic money with their own anchor.

Sri Lanka’s central bank has earlier cautioned the public on the use of crypto currencies.

The committee is mandated to study the regulations and initiatives of other countries such as Dubai, Malaysia, Philippines, European Union and Singapore and propose a suitable framework for Sri Lanka.

Legal Tender

However, the central bank governor said there is no policy change on Sri Lanka’s currency transaction method.

In Sri Lanka the central bank has a monopoly on money for transactions (legal tender) with limited use of US dollars for deposits, loans and transactions with foreign customers such as tourists.

“Our policy on cryptocurrency has not changed. Our stance is the same,” Cabraal told a press briefing last week.

“If somebody is doing some other transactions, they should take the risk of their action.

“This is not like a barter system. Sri Lanka’s currency unit is rupee. Only rupee is approved by the central bank as the transaction until. Nothing else has been approved.”

Crypto currencies such as Bitcoin and Ethereum are being traded widely in exchanges but their use for transactions, debt or deposits (denominational currency) is limited or non-existent.

Central banks have also started offer virtual currencies to make use of new clearing technologies such as blockchain and also to compete against the rapidly evolving cryptocurrencies.

Speculative Tool

New Bitcoins for example are ‘mined’ or created under a limited and apparently finite anchor denoted by its algorithm, which has made it extremely volatile and more of a speculative asset than a tool for transactions.

However they have attracted interest among speculators and young people as the US Federal Reserve and other central bank printed money and fired speculative bubbles.

“There is no specific law on cryptocurrency,” TMJYP Fernando, the centrak bank’s deputy governor told reporters.

“But we have informed the general public about the dangers of engaging in that currency. So, the people who have engaged in this will have to bear the risk of that.”

While Cryptocurrencies not come into general use yet, partly due to high transaction costs, they have been in use for some criminal activities due to their anonymity, just like central bank paper cash, which are used for illegal activities now rather than bank accounts.

There have also been concerns raised about cryptocurency exchange operators.

El Salvador recently made Bitcoin legal tender, raising concerns that a close relative of the President Nayid Bukele has been influenced by exchange operators who will dump bitcoins on the public and suck out dollars (The Bukele Clah that rules with Nayib)

El Salvador is now fully dollarized after its central bank collapsed amid money printing and civil wars.

By 2004 its old Colon currency has effectively gone into dis-use. However cryptocurencies are still new and their creators while wanting set up rule-based rather than discretionary money may not have hit on the correct anchor that has the qualities of money.

However central banks that print money, lower living standards and create social unrest have block the evolution of new money as well as the adoption of existing stable money from better central banks through legal tender laws.

Sri Lanka’s Colombo Port City has freed its residents from existing de facto and de jure legal tender restrictions by being a dollarized area. (Colombo/Oct18/2021)

Comments (2)

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  1. says:

    Thank you

  2. Nick says:

    If I were Sri Lankans, I would switch to anonymous systems like Utopia P2P It is better to play it safe and use such systems to be completely safe.

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Your email address will not be published. Required fields are marked *

  1. says:

    Thank you

  2. Nick says:

    If I were Sri Lankans, I would switch to anonymous systems like Utopia P2P It is better to play it safe and use such systems to be completely safe.

Sri Lanka cabinet okays appropriation bill for 2024 budget

ECONOMYNEXT – Sri Lanka’s cabinet of ministers had approved a draft Appropriation Act for 2024, the state information office said.

The Finance Minister’s proposal to gazette the bill and table it in parliament was approved by the cabinet.

Presenting the appropriation bill is the first stage of presenting a budget for 2024,

The appropriation bills set outs the expenditure plans for each ministry.

The budget proposals, made in November is called the second reading of the Appropriation Act. (Colombo/Sept24/2023)

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Sri Lanka’s MEPA to get 28.5 mn rupees from Singaporean AEPW, for beach clean up

ECONOMYNEXT – Sri Lanka’s Marine Environment Protection Authority (MEPA) is to receive 5.7 million rupees a year, for five years, from Singapore-based marine waste solutions provider, Alliance to End Plastic Waste (AEPW), to maintain 8 beach cleaner machines.

The donation is meant to support MEPA clean coastal areas across Sri Lanka, using BeachTech Hydro Sweepy beach cleaner machines, previously donated by the organisation.

The oil industry-founded non-governmental organisation donated the 8 beach cleaners worth about US$180,000 to MEPA in the wake of the 2021 MV X-press Pearl ship disaster.

The machines manufactured by Kässbohrer Geländefahrzeug AG, a German company, are effective at cleaning up plastic nurdles and other types of potentially harmful non-biodegradable waste, minimising human contact with hazardous materials.

As a significant amount of money is spent for the deployment of these machines for beach cleaning activities, the Alliance to End Plastic Waste has agreed to provide the funds for the upkeep of the machines for a period of five years.

With this financial donation, the Maritime Environment Protection Authority will be able to continue using these machines without interruption to clean identified beaches in the future. (Colombo/Sep26/2023)

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Sri Lanka’s SEC makes four new appointments

ECONOMYNEXT – The Securities and Exchange Commission of Sri Lanka (SEC) made four new additions from diverse backgrounds to its leadership.

These appointments are expected to increase the effectiveness of the SEC secretariat in the respective operating areas, the SEC said.

Manuri Weerasinghe, with over 20 years of experience in accounting, financial management, financial reporting and auditing, was appointed Director, Corporate Affairs.

She is a Fellow Member of CA Sri Lanka, member of the Chartered Institute of Management Accountants and a member of the Certified Practicing Accountants of Australia.

Her academic credentials include a Master of Business Administration and a BSc (Hons) in Accountancy and Financial Management (Special).

Prior to joining the SEC, she served in several financial management positions in Bermuda and Sweden.

Madura P R Wanigasekara was appointed Chief Digital Officer. He has over 20 years delivering and managing IT solutions, and has held several senior management positions in the public and private sectors.

His academic qualifications include a Master of Science in Information Technology from the University of Colombo and a Bachelor of Information Technology from the Curtin University of Technology.

He is also a member of the Australian Computer Society (ACS).

Sharmila Panditaratne was appointed Assistant Director, Legal and Enforcement.

She is an Attorney-at-Law with over 21 years of experience as a securities market regulator.

She holds a Master of Laws degree from the University of Houston, Texas and has worked at two law firms in the USA prior to joining the SEC.

Riyaz Bary, Deputy Solicitor General at the Attorney General’s Department was appointed a Director on secondment basis. (Colombo/Sep26/2023)

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