The Central Bank of Sri Lanka (CBSL) held its first-ever Reserve Management Conference on September 10 and 11 at The Kingsbury in Colombo, bringing together roughly 50 speakers and participants from more than 13 institutions including the Asian Development Bank, Banque de France, the Bank for International Settlements, the Reserve Bank of India, and the World Gold Council. The timing is pointed: Sri Lanka rebuilt its gross official reserves to US$6.59 billion as of July 2026, up from a catastrophic low of approximately US$50 million in early 2022 that triggered the country's sovereign default.

The agenda covered geopolitical fragmentation, gold, artificial intelligence in portfolio management, and the role of the US dollar in reserve portfolios. One item stood out for its novelty: a formal session on digital and tokenised assets in official reserves. That topic has moved quickly from the margins to the mainstream of central bank policy discourse, and the CBSL conference gave it a platform in South Asia.

From Default to Forum Host

Sri Lanka's 2022 collapse was severe by any measure. The country burned through its reserves defending a pegged exchange rate and servicing external debt, then defaulted on roughly US$51 billion owed to foreign creditors, widely described as the first sovereign default in the Indo-Pacific in over two decades. The social and political upheaval that followed was severe: mass protests swept the country and the sitting president fled.

Sri Lanka has operated under a US$3 billion IMF Extended Fund Facility since the crisis. Separately, CBSL purchased a record US$579 million in foreign exchange in August 2026 alone, with net purchases of US$1.48 billion over the first eight months of the year, as the central bank works to rebuild reserve buffers. The Sri Lankan rupee depreciated 5.6% year-to-date through end-August 2026, adding urgency to those efforts.

Governor Dr. Nandalal Weerasinghe, who delivered the keynote address, framed the underlying lesson plainly. "The most sustainable strategy is not simply to acquire reserves but to build an economy that naturally generates and retains foreign exchange," he said. He also acknowledged the changed nature of the job: "Reserve managers today operate in a world shaped by geopolitical fragmentation, strategic competition, trade tensions, sanctions. Geopolitical risk can no longer be treated as external to the investment process; it has become integral to reserve management."

Where Tokenised Assets Fit In

The conference's digital assets session reflects a shift happening at the institutional level globally. The IMF published a formal policy note in 2026 classifying three types of on-chain settlement instruments: tokenised bank deposits, stablecoins, and tokenised central bank reserves. Tokenised central bank reserves are essentially claims on a central bank encoded on a digital ledger, designed to eliminate the credit risk that exists in standard interbank settlement. The IMF described the trend as a structural shift requiring urgent policy attention.

The market for tokenised real-world assets (RWAs), a broad category that includes tokenised bonds, funds, and commodities represented on a blockchain, reached US$19.32 billion in March 2026, a 256.7% increase over the prior 15 months.

Governor Weerasinghe was careful not to endorse adoption outright. "Innovation is important, but should never come at the expense of the fundamental safety and liquidity of reserves," he said. "Newer instruments such as digital assets should reflect each central bank's own objectives, liquidity needs, risk tolerance."

The Gold and Dollar Questions

The conference also engaged directly with the de-dollarisation debate. Domenico Nardelli, Treasurer of the Asian Infrastructure Investment Bank, addressed the forum on the evolving international financial landscape. His full conference remarks were not publicly available at the time of publication; in other public engagements during 2026, however, Nardelli has noted that reserve managers now face material price volatility even in traditionally safe assets such as US Treasuries, and has pushed back against expectations of rapid dollar displacement, pointing out that the greenback still accounts for roughly 57% of global allocated reserves.

That figure is, however, expected to shrink. A 2026 World Gold Council survey found that 74% of responding central banks expect the dollar's share in global reserves to fall over the next five years. The same survey found that 89% of respondents expect global gold reserves to rise over the next 12 months, and 45%, a record high, plan to increase their own holdings. Central banks globally purchased 244 tonnes of gold on a net basis in the first quarter of 2026 alone. The World Gold Council projects full-year 2026 net purchases of approximately 850 tonnes, consistent with a four-year average of roughly 1,000 tonnes annually.

What It Means for the Region

For South Asian monetary policy, the conference carries practical weight. Sri Lanka's reserve portfolio is being built from near-zero, and the choices CBSL makes now about currencies, instruments, and settlement rails will have lasting consequences. India, the Gulf, and China are each developing alternative payment and settlement infrastructure, from India's UPI-linked bilateral trade agreements to Gulf central bank digital currency (CBDC) projects currently in live deployment to China's mBridge digital currency platform. CBSL's engagement with this set of questions, in a public forum with regional peers present, signals that Colombo intends to participate in shaping those choices rather than simply inheriting them.

The conference also highlighted the growing role of artificial intelligence in reserve portfolio management, a development Governor Weerasinghe addressed directly in his keynote. For South Asian fintech, the signal is significant: expectations are rising that the analytical tools used to manage official reserves will evolve as rapidly as the instruments themselves.

Sri Lanka's recovery is playing out against a challenging macroeconomic backdrop. GDP growth slowed to 4.2% year-on-year in Q2 2026, down from 5.0% in Q2 2025, partly owing to Middle Eastern geopolitical escalation and fuel shortages. Those pressures connect directly to the conference's central themes: geopolitical fragmentation is not an abstract risk for Colombo but a live constraint on growth.

Sri Lanka's IMF program continues, with the revised Net International Reserves target set at US$778 million, down from an earlier US$944 million benchmark. Sovereign bond repayments resume in April 2028. The conference proceedings, including any formal position papers on digital assets, had not been released publicly at the time of publication.