Due to lack of regulatory oversight during times of economic and political turmoil, the Central Bank of Sri Lanka (CBSL) advised the public on the purchase of cryptocurrencies.
In the notification CBSL declaration You have not granted a Sri Lankan business permit or license to perform cryptocurrency-related services such as exchanges, initial coin offerings, and mining.
The central bank has issued a warning against the use of cryptocurrencies because of “recent trends in the use of cryptocurrencies”. This was probably a reference to the market downturn and the high volatility of cryptocurrencies such as Bitcoin. CBSL said,
“Cryptocurrencies are … considered unregulated financial instruments and there is no regulatory oversight or safeguards regarding their use in Sri Lanka. Therefore, the general public is a significant investment in VCs that brings to users. You are warned of financial, operational, legal, and security-related risks and potential customer protection concerns. “
A country at stake
Weeks of political and economic instability have flooded the streets of Sri Lanka with tens of thousands of demonstrators this week.Hundreds of demonstrators on weekends Gotabaya Rajapakusa Live in Colombo, get food and take control of the building.
Just a few hours before he was supposed to resign, According to reports President Rajapaksa He reportedly left the country for the Maldives.
Best ever Inflation in the country, which is 54.6%, is currently pushing household finances beyond the threshold. The central bank raised interest rates to 15.5%. This means that while debt repayments have increased significantly, people’s savings have been wiped out.
In addition, the government has imposed restrictions on fuel purchases, with 22 million people suffering the greatest humanitarian catastrophe in 70 years. There is a national shortage of both food and medicine.
There has never been a bigger opportunity to make cryptocurrencies available to the general public so that they can own stablecoin as an inflation hedge. Alas, the central bank has other plans.
Cryptographic and blockchain activity research
Central Bank of Sri Lanka helped create KnowYourCustomer Recent proof-of-concept project. Investigating the use of blockchain and cryptocurrency mining was part of a government initiative, despite public warnings about cryptocurrencies.
As a safeguard against high inflation and imminent bankruptcy in the country, some Sri Lanka want to keep stablecoins like USDT and USD coins.