Sri Lanka will set up a sovereign-backed fund of funds to invest in startups, develop a regulatory framework for virtual assets, and expand telecom coverage to more than 99% of the population, Deputy Minister of Digital Economy Eng. Eranga Weeraratne said at the Sri Lanka FinTech Festival 2026 in Colombo.
“We are setting up a fund of funds, a sovereign fund, for investing in our startups, and we are inviting other international and local funds to contribute.”
The fund is expected to provide matching capital for startups, with the government working alongside local and international fund managers on the policies and documentation needed to connect Sri Lankan entrepreneurs to global capital, the Daily FT reported.
Virtual assets and digital payments
Work is under way on regulations for virtual assets and virtual asset service providers, Weeraratne said — a move intended to give businesses and investors clarity and allow local firms to innovate in the sector.
On payments, he said the government would push QR-based transactions through promotions, incentives and support for devices, aiming to move both consumers and merchants away from cash. He said banks should build financial products linked to digital payment usage, because transaction records can help small merchants demonstrate performance and creditworthiness.
“Digital payment histories can become a new form of collateral for SMEs.”
The case for moving faster
Weeraratne acknowledged Sri Lanka may be a few years behind other countries in the region on digital payment and fintech adoption, but argued the country has what it needs to close the gap: a strong IT talent pool, an established IT industry, a heavily banked population, high literacy and government commitment to digital transformation.
The ambition, he said, is to move Sri Lanka from a cash-heavy society towards a cash-light, digitally enabled economy, while helping local IT and fintech firms export solutions to global markets.
The exhibition day
Reporting on the festival’s exhibition day, the Daily Mirror said the Deputy Minister framed the goal as positioning Sri Lanka as an emerging digital financial hub by expanding digital payment infrastructure, cross-border transactions and international partnerships, and that strengthening public-private partnerships would be essential.
The festival brought together banks, financial institutions, technology companies and international partners. It was organised by FinTech Forum Sri Lanka with the Ministry of Digital Economy, sponsored by Visa.
Context
The push sits alongside a broader digital-skills problem. Official figures reported this week put computer literacy at 38%, meaning more than half of Sri Lankans cannot independently use a computer — a constraint on any shift to digital payments at scale.
Not reported
Neither filing states the size of the proposed sovereign fund, who will manage it, when it will be capitalised, or whether legislation is required. Neither gives a timetable for the virtual asset regulations, names the regulator that would administer them, or says whether the Central Bank has endorsed the framework. The target of 99% telecom coverage carries no date.