Port City Bitcoin Exchange Will Be Established In 3 Months

Advertising

DocuSign’s local integrator, Bridge Advisory and Consulting (BAC), says it will launch Sri Lanka’s first regulated crypto exchange in the port city within the next 3 months. They claimed to have communicated with the Securities and Exchange Commission alongside the Central Bank to create a regulatory framework.

BAC co-founder Michael Sathasivam noted that the exchange could lead to exponential growth in Sri Lanka’s capital markets given the growth trajectory of the broader cryptocurrency markets.


Michael Sathasivam

Sathasivam was speaking on June 11 at a webinar hosted by BAC to present a cryptocurrency-related strategy for economic recovery. Currently, it is estimated that over 300,000 Sri Lankans own some form of virtual crypto assets. Sri Lankans and neighboring countries use either online services or community-organized meetup events to exchange their assets. The penetration of the cryptocurrency ecosystem in Sri Lanka has recently been featured on popular blogs when crypto enthusiasts were able to travel and transact with local guesthouses transacting virtual currency. Given the recent collapse of the rupees, the industry is of the view that there has been a significant unregulated move into cryptocurrency by prominent businessmen.

Advertising

Sathasivam noted that the rents charged by the banking system for administering the payment system were too high given the advent of digitalization. Booking agencies that facilitate online transactions make an estimated profit of US$15 million in booking processing fees in Sri Lanka alone.

Sathasivam reiterated claims that the regulator will continue to work to stifle the advent of inbound payments through the PayPal ecosystem. PayPal has always been able to lower the rates offered by Western Union. Given the scale of remittances to Sri Lanka, PayPal’s entry would hamper large supernormal profits that accrue to the banking sector. The historic excessive markups taken by the banking sector on foreign currencies allowed the long-term survival of the informal foreign exchange market which subsequently perpetuated the country’s insolvency in dollars.

Given the widespread recognition of the politicization of the availability of the dollar, the industry at large has called for recent tax changes to include a 40% tax level on foreign exchange gains for businesses. This would punish arbitrage seekers and be an effective way to induce companies to convert currencies. The industry has also called on the Central Bank to allow price competition to exist in the transaction space and force major merchants to pass on the cost of the transaction to the consumer. The wider industry has accused the regulator, which owns a stake in for-profit payments firm LankaClear, of stifling the domestic payments ecosystem.

They note that price competition would harm the banking system, which benefits considerably from the excessive rents garnered by the Visa and Mastercard ecosystem.

BAC claims to work with property developers to tokenize apartment ownership. Given the widespread availability of off-the-shelf software, creating an exchange is only dependent on regulatory clearance. Financial centers have been working on a “race to the bottom”. (DP)

We would like to give thanks to the author of this post for this amazing content

Port City Bitcoin Exchange Will Be Established In 3 Months


You can view our social media profiles here and other pages related to them here.https://metfabtech.com/related-pages/