Sri Lanka is moving closer to establishing a formal regulatory framework for virtual asset service providers, with the government’s VASP Sub-Committee holding its second meeting on 25 March 2026 to advance a draft concept paper that has been in development across multiple stakeholder groups.
The meeting was chaired by Deputy Minister of Digital Economy Eranga Weeraratne, with participation from Dr. Hans Wijayasuriya, Chief Advisor to the President on Digital Economy, Ministry Secretary Waruna Sri Dhanapala, and Dr. Subhani Keerthirathne, Director of the Financial Intelligence Unit at the Central Bank of Sri Lanka. Twenty-eight committee members took part, contributing observations and recommendations to strengthen the draft that was first tabled at the previous session.
The discussions produced agreement on consolidating the feedback into a unified paper capturing the key findings from the session. Deputy Minister Weeraratne also directed the Securities and Exchange Commission and the Ministry of Digital Economy to jointly review regulatory frameworks adopted in other jurisdictions and present their findings at the next meeting, currently scheduled for April. The SEC was additionally asked to identify potential challenges it may face as the prospective regulator, an important practical step that often gets skipped in early-stage policy work.
The regulatory push has been building since February, when the proposed VASP framework was formally presented to the main Counter Financing of Terrorism Committee of the Central Bank. That presentation marked the framework’s entry into Sri Lanka’s broader anti-money laundering and counter-terrorism financing architecture, aligning the country’s approach with Financial Action Task Force standards that many jurisdictions have already moved to implement.
The framework being developed covers several core areas: registration requirements for VASP operators, Know Your Customer and anti-money laundering obligations, reporting standards, and a phased implementation roadmap running through 2026 and 2027. It draws on both a national risk assessment of the virtual asset sector and recommendations from the multi-stakeholder committee that has been driving the process.
For Sri Lanka, getting this right matters beyond compliance optics. A credible regulatory framework for virtual assets is increasingly a prerequisite for attracting fintech investment and positioning Colombo as a serious player in the regional digital economy. The April meeting will be a key test of whether the political will behind the framework translates into a workable regulatory design.