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Sri Lanka Creates a Panel to Study the Blockchain and Crypto Mining

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Sri Lanka Creates a Panel to Study the Blockchain and Crypto Mining

The Sri Lankan Cabinet has approved the creation of a committee to study the rules and regulations of regulating digital banking, the blockchain, and crypto mining. The Department of Government Information disclosed this news through a press release on October 7, noting the panel will also research ways to prevent money laundering, terrorism financing, and other criminal activities related to the above technologies.

According to the news release, which the agency has since taken down, the committee will also study know-your-customer (KYC) procedures. The team comprises five members, and they will obtain information by analyzing the crypto regulatory frameworks and approaches of countries Dubai, Malaysia, the Philippines, and Singapore, as well as some European Union member states.

Reportedly, Namal Rajapaksa, a Cabinet member who serves as the Minister of Development Coordination and Monitoring, Minister for Sports and Youth Portfolio, and the State Minister of Digital Technology and Enterprise Development of Sri Lanka, proposed the formation of this panel.

The publication added that these efforts aim to attract foreign investments in the nascent crypto and blockchain industries. In so doing, Sri Lanka hopes to expedite the modernization of its economy under the national policy framework, Vistas of Prosperity and Splendour.

Sri Lankans continues warming up to crypto

Explaining what pushed Sri Lanka to consider studying the blockchain, digital banking, and crypto mining, the Department of Government Information said,

The necessity of developing an integrated system of digital banking, blockchain, and cryptocurrency mining has been identified to pace on par with the global partners in the region while expanding trade to the international markets.

This news comes after economic uncertainty due to the COVID-19 pandemic drove Sri Lankans to embrace crypto. While Sri Lanka’s crypto community dates as far back as 2015, the difficulties saw the community experience an influx of newcomers. Although most newcomers tried to make quick profits, others joined the nascent asset class to hedge against inflation.

At the moment, the crypto industry in Sri Lanka is unregulated. However, enthusiasts have to rely on peer-to-peer (P2P) platforms to complete transactions because the foreign currency exchange laws prohibit purchasing cryptos with credit cards.

This has seen P2P platforms thrive in the country, with Paxful’s trading volume swelling from under $50,000 in April 2020 to over $150,000 in April 2021. However, this volume took a sharp nosedive in May, after the crypto market crashed.

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Jinia is a fintech writer based in Sweden focusing on the cryptocurrency market and blockchain industry. Besides Cryptotelegram, she has been writing for some renowned publications such as Cointelegraph, Invezz, etc for years. She also has experience in writing about the iGaming industry.

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