Sri Lanka moves to regulate cryptocurrencies amid global fraud concerns

Central Bank Governor Dr Nandalal Weerasinghe said the Government and the Central Bank are preparing legal and regulatory safeguards to protect Sri Lankans from cryptocurrency-related fraud.

Speaking at the Sri Lanka FinTech Festival 2026 in Colombo, Weerasinghe said authorities were putting in place laws, supervision and other safeguards to address risks associated with virtual assets.

“Whatever fraud takes place in the world, we are prepared to protect the people of our country. We are putting in place the necessary laws, supervision and safeguards to achieve this,” he said.

Weerasinghe also clarified that holding cryptocurrency as an asset was not an offence in Sri Lanka, although cryptocurrencies were not recognised as legal tender or accepted as a means of payment.

Under the existing legal framework, the Sri Lankan Rupee remains the country’s only legal tender. The restrictions on the use of cryptocurrencies for payments are intended to protect monetary sovereignty and prevent virtual currencies from replacing the rupee in domestic transactions.

The Ministry of Digital Economy has prepared a concept paper setting out measures to regulate virtual assets and forwarded it to the Legal Draftsman’s Department.

Deputy Minister of Finance and Planning Dr Anil Jayantha Fernando said Cabinet approval had also been granted to move ahead with a regulatory framework covering virtual assets and virtual asset service providers.

Under the proposed framework, the Securities and Exchange Commission would become the regulator for virtual assets and service providers, while the Central Bank, Financial Intelligence Unit and Inland Revenue Department would have coordinating and supervisory roles.

The Government is also seeking to strengthen measures against money laundering, terrorist financing and proliferation financing linked to virtual assets.