Beyond Traditional Banking: Evaluating the Role and Challenges of Blockchain and Cryptocurrency in Sri Lanka

'Banking is necessary, but banks aren't.' Bill Gates' controversial statement in 1994, that new inventive alternative financial banking systems are rendering banks obsolete, is now being realized. Cryptocurrency is now at the cutting edge of financial development, generating a lot of attention. It is a string of encrypted data used to represent a unit of money. It is thought that digital currencies will define the future of finance since they provide both possibilities and threats on the financial markets. Cryptocurrencies have the potential to help a country's economy while also facilitating illegal acts like terrorism and money laundering. As a result, there is a contradiction between regulation and user anonymity when it comes to the use of cryptocurrencies. Since 2009, cryptocurrency has grown in popularity as a speculative investment, and given the present economic condition, an increasing number of Sri Lankans are turning to digital trading platforms. Although purchasing virtual assets is not a legal investment, it is increasingly being used in Sri Lanka for investments and commercial activities. As the digital currency industry remains unregulated, it poses risks and dangers to traders when they run the risk of violating the law. The purpose of this investigation is to discuss Sri Lanka’s present legal framework, highlight the gap in regulation of Cryptocurrency and recommend appropriate legislation proposals for the country. The Study emphasizes that banking is still necessary, but banks need to adapt and evolve to stay relevant in the digital age. Blockchain technology, the underlying technology behind cryptocurrencies, has the potential to revolutionize traditional banking systems. However, the study suggests that appropriate regulatory measures are necessary to manage the risks associated with cryptocurrencies and ensure ethical use of these technologies. The research design to be carried out by analysing existing literature subjective to qualitative analysis.