Sri Lanka joins the global crypto adoption drive! Only a month after Sri Lanka’s central financial institution issued a public discovery of the dangers of cryptocurrency investments, the south Asian country seems to be dancing to a new tune.
Through a cabinet decision, the Government of Sri Lanka has approved establishing a committee to propose a policy on blockchain technology, digital banking, and crypto mining.
On Oct. 8, Sri Lanka’s director-general of government information, Mohan Samaranayake, shared a letter showing that the government has approved a recent proposal to attract investments in the country’s blockchain and cryptocurrency initiatives. The proposal presented by the state minister for project coordination and monitoring, Namal Rajapaksa, was approved by the Cabinet Minister.
Task Force Committee on Crypto
Given the recent constraints on the outflow of forex, this is a progressive move forward. The government will appoint a committee consisting of skilled professionals in both the private and public sectors. Their task is to inform the Cabinet of the Acts, Rules, and Regulations of its crypto and blockchain-related findings. The committee will also monitor laws and regulations implemented by other nations to set up guidelines in anti-money laundering, terrorism financing, criminal activities, and the Know Your Customer processes.
In addition, the Sri Lanka government says it has identified the necessity of integrated digital banking, blockchain technology, and cryptocurrency mining system, and other essential services required to facilitate the creation of a digital business environment. Many countries in South Asia have also begun evaluating and developing this sector.
The committee will consist of eight members; Two of the committee members represent international fintech giants; Sandun Hapugoda from Mastercard and Sujeewa Mudalige from PricewatershouseCoopers (PwC). The committee members also include two members from traditional finance. They include Rajeeva Bandaranaike, CEO of Colombo Stock Exchange, and Dharmasri Kumarathunge, director of the Central Bank of Sri Lanka.
The other four members represent various national authorities. These national authorities are; Sri Lanka Computer Emergency Readiness Team (SLCERT), Department of Government Information, Information and Communication Technology Agency (ICTA), and the President’s Council.
In addition, in a recent Cointelegraph report revealed that the value of transactions in the Central and Southern Asia region amounted to $572.5 billion between July 2020 and June 2021, with India representing the highest global transactional value.
What Exactly Are Crypto Mining and Blockchain?
Crypto mining refers to the process of gaining cryptocurrencies by solving cryptographic equations. In other words, cryptocurrency mining (crypto mining) is a process through which transactions from various forms of cryptocurrency are verified. Crypto mining is done by the use of high-power computers allowing new coins into circulation. The solving process also involves verifying data blocks and adding transaction records to a public record ledger. This public ledger is known as a blockchain.
As aforementioned, blockchain refers to a public digital ledger of transactions. Moreover, this way of storing information keeps the information safe from any altering or hacking. Individuals deal with each other directly without any third party or intermediary such as the government.