Income earned through cryptocurrency transactions and related activities will be treated as "other income" for tax purposes, despite cryptocurrencies not being recognised as legal tender in Sri Lanka, Deputy Minister of Finance and Planning Anil Jayantha Fernando told Parliament today (09).
Responding to questions raised by Member of Parliament Ravi Karunanayake, the Deputy Minister said that under the Central Bank of Sri Lanka Act, No. 16 of 2023, the Sri Lankan Rupee remains the country's only legal tender. He noted that cryptocurrencies and other virtual or digital assets are not accepted as a means of payment in Sri Lanka.
Fernando stated that crypto assets are not regulated in the country as an asset class or financial instrument. He added that the Central Bank of Sri Lanka has not licensed or authorised any cryptocurrency trading platforms, digital asset exchanges, mining operations or related service providers to operate within the country.
He further explained that cryptocurrency trading activities are neither formalised nor supported through Sri Lanka's regulated financial system. Since digital asset platforms are not licensed or supervised by any domestic authority, individuals who engage in such activities do so at their own risk.
The Deputy Minister said the Central Bank has repeatedly informed the public since 2018 that cryptocurrencies are not recognised as legal tender in Sri Lanka.
He also confirmed that the country's existing regulations do not recognise cryptocurrency or virtual asset investments. In addition, holders of residence cards in Sri Lanka are prohibited from making foreign exchange payments for virtual currency transactions.
Fernando emphasised that, under the current regulatory framework, Sri Lanka's formal financial system cannot be used to facilitate cryptocurrency-related transactions.
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