- CBSL-led initiative aims to gather data on virtual asset transactions to prevent illicit financial flows
- Framework for registering cryptocurrency service providers sought ahead of SL’s AML/CFT evaluation
Sri Lanka is expected to appoint a task force headed by the Central Bank of Sri Lanka (CBSL) to gather information on cryptocurrency-related transactions to create a framework to prevent money laundering, Central Bank Governor Dr. Nandalal Weerasinghe said.
Speaking at the Monetary Policy review press briefing yesterday (23), he said that the discussions are ongoing between the Financial Intelligence Unit, Finance Ministry and the Digital Economy Ministry to create a framework to gather information on ]virtual assets service providers such as cryptocurrency.
He said that there should be a framework to register cryptocurrency service platforms and allow them to share transaction information with the authorities to prevent money laundering.
Weerasinghe said this is a requirement under the ongoing AML/CFT reforms in Sri Lanka when the mutual evaluation takes place next year.
“We have proposed the establishment of a task force to gather the required information,” he said.
Moreover, Weerasinghe said that based on the information gathered by the task force, it is the government that should decide whether they need to introduce regulations to cryptocurrency transactions or whether to introduce taxes to those transactions.
Sri Lanka’s financial sector is governed by several key laws. The Monetary Law Act No. 58 of 1949 establishes the CBSL and defines its regulatory powers over banking and non-banking financial institutions.
The Banking Act No. 30 of 1988 regulates banks, ensuring proper licensing and risk management, while the Finance Business Act No. 42 of 2011 oversees finance companies, including leasing and other financial services.
The Securities and Exchange Commission (SEC) Act No. 19 of 2021 governs capital markets and securities trading through the SEC. Additionally, the Financial Transactions Reporting Act (FTRA) No. 6 of 2006 addresses Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) obligations.
But none of these laws cover cryptocurrency transactions in the country and the Central Bank has not identified cryptocurrency payments as legal means of payment in the country.