Central Bank Governor Dr. Nandalal Weerasinghe has reiterated that digital assets, also known as virtual assets, cannot be used for payments between residents in Sri Lanka under the country’s existing legal framework.
Speaking at the Sri Lanka FinTech Festival on Tuesday (3), the Governor said the restriction was important to prevent digital assets from replacing the Sri Lankan rupee in domestic transactions and to safeguard the country’s monetary sovereignty.
He acknowledged that emerging technologies, including digital assets, could create new opportunities for the financial sector but stressed the need for clear regulations and appropriate safeguards.
“As technology evolves, regulatory clarity must evolve with it,” he said, adding that regulations should support responsible innovation without undermining financial stability.
The Governor also warned that certain digital assets could expose consumers to significant price volatility and facilitate illicit financial activities.
He highlighted several risks associated with financial technology, including cyberattacks, operational disruptions, fraud, data breaches and inadequate consumer protection.
Dr. Weerasinghe stressed that financial stability must not be compromised as Sri Lanka expands its digital financial services.
Meanwhile, the Governor said the Central Bank remained open to financial innovation and had already introduced a FinTech Regulatory Sandbox to allow eligible innovative financial solutions to be tested under appropriate safeguards.
He said the Central Bank would continue encouraging competition and technological development while ensuring that financial stability, public trust and consumer protection remained key priorities. (Newswire)