ANN/THE STRAITS TIMES – A billionaire cryptocurrency evangelist may have had a tougher reception than he expected when proposing widespread adoption of Bitcoin to a bankrupt country.
Silicon Valley investor Tim Draper was in Sri Lanka to shoot an episode of his Meet The Drapers TV show with local entrepreneurs, and met President Ranil Wickremesinghe on Tuesday to proselytise the adoption of cryptocurrency. He journeyed to the central bank the next day with the same pitch – but embattled governor Nandalal Weerasinghe, who is still working to calm financial mayhem, was having none of it.
“I come to the central bank with decentralised currency,” proclaimed Draper, dressed in a Bitcoin tie for the meeting.
“We don’t accept,” Weerasinghe said.
It is a frostier response than Draper has received in some other locations. The tiny island country of Palau in the Pacific made him the founding resident of its digital residency programme, for instance.
Fuel and food shortages in Sri Lanka stirred riots last year that forced the then president to flee the country and later resign. The debt-stricken nation is in talks with international creditors about debt restructuring, aiming to get the International Monetary Fund (IMF) to come up with a rescue plan. Inflation stands at 54.2 per cent and last year, the economy contracted eight per cent, Weerasinghe said.
To crypto enthusiasts, that might seem like the perfect place for Bitcoin adoption. One of the main uses that people see for crypto is as a steady store of value not subject to changes in central bank or government policy. Draper even cited El Salvador, which adopted Bitcoin as legal tender, in the meeting. But experiences like El Salvador’s, which staved off default at the last minute just last month, might serve as a cautionary tale more than anything.
Draper, 64, a Silicon Valley venture capitalist and early backer of companies like Tesla, Baidu, Skype, Coinbase and Robinhood, made news in 2014 when he purchased seized Bitcoin at a United States Marshals Service auction. Bitcoin is hovering in the low USD20,000s – but he sees it reaching USD250,000 this year.
He kept trying in the meeting with Weerasinghe. “Does the administration have the guts to do it?” he asked. “What is the advantage of having your own currency?”
Further, Draper said he was “a little worried about you guys”, and that the financial crisis provided a window of opportunity for a country “known as the corruption capital”. Colombo could avert graft by keeping perfect records after adopting Bitcoin, he argued.
Weerasinghe said other technologies could efficiently distribute financial services to foster inclusion and disburse electronic welfare payments, and noted that a country without its own currency could not have monetary policy independence.