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Sri Lanka's Central Bank Warns Against Use of Cryptocurrency Amid Economic Crisis (techcrunch.com) 34

Posted by msmash from the closer-look dept.
Sri Lanka has warned its citizens against using cryptocurrency, which it said is "largely unregulated" amid an ongoing political chaos in the South Asian nation. From a report: The country's central bank, CBSL, said Tuesday it does not consider cryptocurrencies as legal tender in the country and reminded that it has not given license or other authorization to any entity to operate in the nation. [...] The warning comes at a time when the sovereign-debt crisis has crippled the local economy. The South Asian nation, which fell into default in May this year and is struggling to secure essential imports from other nations, reported that inflation had touched a year-on-year record of 54.6 percent in June.
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Sri Lanka's Central Bank Warns Against Use of Cryptocurrency Amid Economic Crisis More

Sri Lanka's Central Bank Warns Against Use of Cryptocurrency Amid Economic Crisis

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  • The People are burning down the central banks because they realized how screwed they are and they're warning people to use central bank currency? That's not how this works.

    • I have to admit, if you could do Proof of Work using power solely generated by burning down banks, that would seem to be more ethical than the way crypto is currently done.

    • Itâ(TM)s a country whose government fucked up. Massively. That doesnâ(TM)t mean youâ(TM)d want the population to hand over its last bit of money crypto scammers.

  • Regulation (Score:3, Insightful)

    by JBMcB ( 73720 ) on Wednesday July 13, 2022 @11:54AM (#62699884)

    Well they drove their regulated currency into the ground. Either propose a solution or let people try to scrape by however they can, including using crypto.

  • The government must try to reestablish confidence on the Sri Lankan rupee to get the fiscal situation under control. They have a responsibility to make statements that nudge the population back toward the official currency, even if they are privately hoarding dollars, USD stablecoins, and precious metals.

    It is interesting to see how so many in the US can clearly see that the rupee has an arbitrary value based on dubious artificial scarcity, government propaganda, and fraying social norms. But at the same t

    • Am actually not sure if they even have an actual government, with the President (or is it ex President now?) running off using a military jet and the protestors refusing to acknowledge the Prime Minister (who is linked closely with the President). I think the PM is now the President. And next in line is the Speaker of Parliment, who I understand is related to the President who just absconded, and so may be ignored by the protestors as well.

      I think they don't really have any functioning government now, excep

    • Re: (Score:1)

      by NFN_NLN ( 633283 )

      > That doesn't mean that crypto won't collapse as well. The future is hard to see.

      If only there was some tangible asset that has remained a medium of exchange for thousands of years that people could fall back on THAT CAN'T BE ARTIFICIALLY FABRICATED.

      Whelp, I can't think of any.

  • I believe I read today that the government has $25 million in foreign reserves. That's right, $25M. Or a relatively modest lottery win in the U.S..

    https://www.aljazeera.com/news... [aljazeera.com]

  • So, they destroyed the regulated money and dared to speak about an unregulated alternative as if this was a negative aspect of it? The confidence and lack of self-awareness of politicians worldwide will never cease to amaze me.

  • Sri Lanka where democracy didn't work (Score:3)

    by FeelGood314 ( 2516288 ) on Wednesday July 13, 2022 @12:33PM (#62700026)
    There are two linguistic groups in Sri Lanka the Tamils (Hindu, Muslim and Christian) who made up nearly a third of the population and Sinhala (Buddhist). Before the English arrived the Tamils where the more dominant group. The Tamils lived in the more northern part of the island and co-operated more with the English than the Sinhalese. At independence the working language of the country was English, the English schools were almost all in Tamil areas, the Tamils made up about half of the doctors, engineers, top civil servants and officers in the army. Even though the Tamils were more rural than the Sinhalese they were in general much more wealthy. Things sort of worked out for the first 15 years of independence but then some Sinhalese politicians stirred up resentment against the Tamils for political gain. They claimed the Tamils mostly illegal immigrants (despite being there for 2000 years) and in the late 67 made Sinhala the official government language.* (they rolled back the law but in practice all government forms were in Sinhala only). The Sinhalese will claim the violence was started by the Tamils but I don't think anyone believe as minority would start widespread open violence. Open civil war broke out in 1987. The main rebel group was the Tamil Tigers but they never had full support of the Tamils likely due to how nasty they were. The war dragged on until the Rajapaksa brothers came to power and were willing to do whatever it took to end the civil war regardless of how many lives were lost. The Rajapaksa where never bright but they were ruthless Sinhalese nationalists. After the war was over they were heroes to Singhalese and since the Tamils were a minority and a good number of them disenfranchised the Rajapaksa ruled for the last 20 years. Sri Lanka was rich in 1945 and even the civil war didn't destroy that. The Rajapaksa are only moderately corrupt but they are incompetent. The country has been living well beyond it's means for the last 10 years on IMF, Chinese and other borrowed money. The borrowed money has now run out. The government was subsidizing fuel, food and fertilizer for farmers. They cancelled the fertilizer subsidy because they wanted to go organic, or more likely they knew they couldn't buy more fertilizer. Price controls meant farmers of some food crops had to sell below costs so they switched to export crops. Now the remaining farmers that do produce food have no fuel to even bring the food to the cities. Things are bad now but in 2 or 3 weeks the food in the southern cities is going to run out. It's a 40km hike through salt marshes from Sri Lanka to India. If I was there I would start walking.

    *to be fair having English as the official government working language was unfair to the Sinhalese since very few of them spoke it. So the Tamils were not completely blameless, the working language in practice should have been changed.

    • I don't know much to verify what you said but

      I don't think anyone believe as minority would start widespread open violence

      Minorities have always gained power over majority by violence. And agianst Buddhists, it is doesn't need to be widespread, just public and unapologetic.

      Words have meaning. Buddhists are more peaceful than Muslims.

      • Minorities have always gained power over majority by violence. And agianst Buddhists, it is doesn't need to be widespread, just public and unapologetic.

        Words have meaning. Buddhists are more peaceful than Muslims.

        I missed that history lesson where a minority won a civil war and gained power over the majority. Closest I can think of is Israel after it's creation. The general rule is minorities lose and lose badly in ethnically driven civil wars. Myanmar has a Buddhist majority and they seem to be quite fine with ethnically cleansing their Muslim minority.

        • You missed that lesson because it doesn't suit you and you prefer to act like a smartass to hide your ignorance and unwillingness to question yourself.

          Because that is how whites have maintained the hegemony.
          That is how Europeans are now called Americans.
          That is how Christianity has spread.
          That is how you can't draw Mohammad publicly.

          There is no cure for someone who doesn't want to take medicine.

  • I can guarantee you that every single Bitcoin and crypto scammer on the planet is celebrating over the prospect of millions of desperate people they can trick out of their money. When you have an imploding economy every Ponzi scheme in the world is going to come out of the woodwork.

    This is not to say I would generally trust Sri Lanka's Central Bank but this doesn't mean you should give all your money to that cool bro with the cryptos.

  • Sri Lanka is just the beginning (Score:1)

    by Anonymous Coward

    Pay attention here folks.

    A lot of people will come out of the wood work, and say Sri Lanka is mismanaged. They aren't wrong per se, but they are also sidelining the very real problems the world is facing right now, especially with regards to food security. They are telling you these things to keep you calm and having you ignore or at least, diminish, the rest of the problems facing the world.

    But the reality is, the world is on a dark path, and you should be concerned.

    Extreme weather events have stunted or r

    • Re: (Score:1)

      by NFN_NLN ( 633283 )

      > Extreme weather events have stunted or ruined crops.

      It's a little disingenuous to not highlight the primary reason for food insecurity is ARITIFICALLY MAN MADE.

    • It wasnâ(TM)t extreme weather. Sri Lanka wanted to go green, causing the lack of production, Germany wanted to go green causing the demand for Nordstream2, the Biden admin wanted to go green causing demand increase for Russian and Iranian oil. All of those things are green policies contributing to instability and reliance on dictatorships for fuel and food.

  • Sri Lanka owes most of its debt to the IMF and West in Dollars (Not China) while a large portion of the USD spending tourists came from Russia and Ukraine. That worked fine when the world economy was globalized. But once Russian dollars were frozen , Russians stopped travelling to foreign countries (Except where they can pay with Rubles). Meanwhile Ukrainians were all drafted into the military. So the decoupling of the world economy into dollar and ruble economies has caught Sri Lanka in a bad place. Fuel,

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