Patali Champika Ranawaka, Chairman of the Republican Budget Committee, voiced concerns about the country’s insufficient infrastructure for online payments. Furthermore, due to weak regulation of the financial ecosystem, approximately 45% of transactions remain unregulated. Ranawaka believes that the Central Bank’s retail digital currency could address this problem.
Central bank officials reached a consensus that a government-backed stablecoin might facilitate more effective tracking of financial transactions. Before initiating a pilot project to examine real-world use cases for the CBDC, the central bank plans to conduct a proof of concept (PoC) study and seek public input.
The anticipated launch date for the digital Sri Lankan rupee is late 2024. However, local lawmakers are questioning the timing of CBDC plans, concerned that a rushed launch could disrupt the financial ecosystem. MPs advocate for a cautious approach to implementing the digital currency.
In addition to the CBDC initiative, the Sri Lankan government is preparing to introduce a national real-time interbank transfer payment network called Lanka Pay. QR codes are being considered for integration. The government initially planned to migrate payment systems used by the Tax Administration to blockchain platforms for more effective financial control. The Budget Committee has directed the central bank to conduct a comparative analysis of neighboring countries India and Bangladesh’s payment systems within 14 days and submit a report.
Last year, the Central Bank of Sri Lanka cautioned its citizens about the risks associated with cryptocurrency investments, crypto trading, and participation in initial coin offerings (ICOs). Previously, the regulator opposed the adoption of Bitcoin and any decentralized cryptocurrencies.