As the nation’s economy continues to deteriorate, the Central Bank of Sri Lanka (CBSL) reiterated its stance on crypto in a notice. On July 12th, the CBSL released a public warning to the public that crypto usage is still prohibited.
In 2018 and 2021, the CBSL has reiterated its position on crypto usage. It has neither authorized any business running “schemes” utilizing cryptocurrency assets. As a result, the ban on crypto exchanges and mining activities remains despite the unstable nation.
No Crypto Usage For People Of Sri Lanka
The CBSL continued by reminding the public about payments for crypto transactions. It made mention of the 2017 Foreign Exchange Act.
According to the Act, citizens cannot make crypto payments using electronic money transfer cards (EFTCs), such as credit or debit cards. This means Sri Lankans cannot make purchases on cryptocurrency exchanges using their bank cards.
Furthermore, the CBSL added that cryptocurrencies were “unregulated financial instruments.” Also, they lacked control or protections for usage within the nation.
It concluded the message with a subtle caution to the public. The central bank reminded them about potential legal ramifications should they experiment with digital assets.
Recently, thousands of protesters flooded the streets of Sri Lanka due to weeks of economic and political unrest. This action must have resulted in a warning by the central bank.
Also, protesters broke into the Colombo home of Sri Lanka’s President Gotabaya Rajapaksa over the weekend. They stole food supplies and took control of the building.
On July 13th, reports claimed that President Rajapaksa had fled the nation. They said he moved to the Maldives only hours before his resignation.
Economic Downturn In Sri Lanka
At an ATH of 54.6%, the country’s inflation is straining household finances beyond their breaking point. The central bank increased interest rates to 15.5% recently.
This implies that while loan repayments have increased significantly, it has wiped out people’s savings. This in turn has led to more hardship
Furthermore, the government has imposed limitations on the purchase of gasoline. This action has thrown 22 million people into the biggest humanitarian catastrophe in seventy years.
As a result, there has been a shortage of both medication and food nationwide. Meanwhile, this is a greater opportunity to make crypto available to the general public.
This would allow them to own stablecoins as a hedge against inflation. However, the central bank has refused despite the country’s crumbling economy.
Besides, the Prime Minister claims that the $50 billion in foreign debt is why the nation is insolvent. Food is running out, there is no fuel, and there is a social disaster in the country.