As the economy of Sri Lanka has run down, many believe cryptocurrencies could be a solution to rescue the country. Yet, the Central Bank of Sri Lanka (CBSL) as the monetary authority decreed that digital currencies lack regulation, and therefore, are prohibited from being used.
According to the CBSL, Electronic Fund Transfer Cards (EFTCs) such as debit cards and credit cards are not allowed to be used for payments and currency transactions. Furthermore, CBSL announced that cryptocurrencies have not authorized any Initial Coin Offerings (ICO), mining operations, or Virtual Currency Exchanges. The bank said:
“The public is [...] warned of the possible exposure to significant financial, operational, legal, and security-related risks as well as customer protection concerns posed to the users by investments in Virtual Currencies (VCs). The public is also warned not to fall prey to various types of VC schemes offered through the Internet as well as other forms of media.”
As cryptocurrencies are fronted as a possible solution, there are plenty of people who provide different ideas on how to rescue the economy. The Founder of Tron, Justin Sun stated that his Web3 could help the country get out of insolvency.
The bottom line is that Sri Lanka’s economy is in crisis, and residents are wondering when will it end. For self-prevention, most residents convert their savings into dollars and some residents invest in digital currencies, even if the government warns against their use.