A report presented to Sri Lanka’s central bank governor Ajith Nivard Cabraal on Monday detailed the results of a now-completed Know-Your-Customer, or KYC, proof-of-concept project.
The project Sri Lanka’s Central Bank, also known as CBSL, included 3 collaborators who developed the concept of Blockchain-based KYC platform. The KYC platform has also been tested by CBSL and 10 regional and international commercial banks, including Amana Bank, Bank of Ceylon, Cargills Bank, Commercial Bank of Ceylon, DFCC Bank, Hatton National Bank, HSBC, National Development Bank, People’s Bank and Standard Chartered Bank. The team launched the project in July 2019 and completed development and testing of the experimental platform on June 10 of this year.
âWe invited software companies to develop a shared KYC PoC for free, as a national project. The response to join this project, both locally and internationally, has been extremely encouraging and we are happy to say that we have finalized the selection of suitable candidates to start development shortly, âsaid the Director of the Central Bank, Payments and Regulations, D. Kumaratunge.
The project was part of a larger Sri Lankan government initiative called Vistas of Prosperity and Splendor as part of the country’s national policy. As reported by Crypto Daily UK, Minister of Project Coordination and Monitoring Namal Rajapaksa, has proposed a new ‘Crypto Committee’ to oversee the exploration of possibilities for using blockchain and cryptocurrency mining in plans Sri Lanka to create a more digital society.
Like many countries around the world, Sri Lanka has suffered severe economic repercussions due to the ongoing global pandemic. Government statistics suggest that the country is now recovering from its GDP growth of -16.4 in the second quarter of 2020. It has, however, lost over $ 400 million in tourism industry revenue and $ 1.3 billion in tourism industry revenue. jobs abroad during the pandemic.
Sri Lanka’s recent economic uncertainty appears to have been the driving force behind its interest in cryptocurrency and the government’s new exploration of KYC technology. Sri Lankan rupee volume on the Paxful peer-to-peer exchange exploded in 2021. The country’s peak in cryptocurrency trading and investment led the Sri Lankan government to issue a public warning regarding the risks of investing in cryptocurrencies.
The Sri Lankan government’s crypto-centric exploration echoes the regulatory actions of other governments around the world. A tax provision in US President Joe Biden’s stalled infrastructure bill has worried many in the US blockchain industry. Also reported by Reuters in July, the EU announced the creation of a new agency to fight money laundering and increase cryptocurrency transparency.
The CBSL has taken more stringent regulatory measures in recent years since it was listed on the G7 Intergovernmental Financial Action Task Force, or FATF âGray Listâ in 2016, for non-compliance in 4 areas: international cooperation, supervision, legal persons and arrangements. and Targeted financial sanctions in the event of proliferation. The country was removed from the FAFT gray list in October 2019.