The Cabinet of Ministers has approved a proposal to introduce a regulatory framework for virtual assets and service providers (VASPs), marking a significant step toward safeguarding Sri Lanka’s financial system against emerging risks.

Currently, Sri Lankan users access virtual assets such as cryptocurrencies through online platforms, peer‑to‑peer exchanges, and direct transactions. 

These activities, however, operate outside the domestic regulatory framework, with VASPs functioning without registration, compliance obligations, reporting standards, or supervision. 

Authorities have warned that this gap poses a risk of financial crimes, including money laundering and terrorist financing.

To address these concerns, a sub‑committee on VASPs has been established under the chairmanship of the Deputy Minister of Digital Economy, with participation from relevant officials. 

The Central Bank of Sri Lanka, the Financial Intelligence Unit, and the Inland Revenue Department have coordinated a supervisory mechanism. 

Within this framework, the sub‑committee has proposed designating the Securities and Exchange Commission of Sri Lanka as the regulatory authority for virtual assets.

Taking these recommendations into account, the Cabinet endorsed the proposal presented by the President, in his capacity as Minister of Digital Economy, to introduce legal provisions and an implementation plan for regulating virtual assets and service providers. (Newswire)

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