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“Adoption of 100% Bitcoin won’t be a Sri Lanka reality ever,” the Governor of the central bank said.

Nandalal Weerasinghe – Governor of the Central Bank of Sri Lanka – rejected Tim Draper’s idea to eliminate corruption in the country by embracing bitcoin.

The banker argued that adopting the primary cryptocurrency could worsen the economic situation of the nation.

The American venture capital investor recently visited Sri Lanka to shoot an episode of his TV show “Meet the Drapers.†He also held discussions with the President of the country – Ranil Wickremesinghe – and the Governor of the central bank – Nandalal Weerasinghe – regarding the financial crisis reigning in the region and the possible solutions that could ease the turbulence.

Draper claimed that Sri Lanka has emerged as a “corruption capital†and suggested shifting towards bitcoin to get on the right track:

“Have you seen Sri Lanka in the news? It’s known as the corruption capital. A country known for corruption will be able to keep perfect records with the adoption of Bitcoin.â€

Weerasinghe, though, was not open towards the idea, claiming “the adoption of 100% bitcoin won’t be a Sri Lanka reality ever.â€

The Governor believes technologies different from the leading digital asset could successfully distribute monetary services and boost financial inclusion in the country.

“We don’t want to make the crisis worse by introducing Bitcoin,†he concluded.

The economic condition of Sri Lanka is quite concerning, with inflation surging above 54%. The country was also hit by an energy crisis last year, which triggered massive protests against the government. The shortage of fuel, domestic gas, and essential goods was so severe that locals had to queue for days to buy supplies.

Draper pointed out El Salvador, which, despite its issues (significant unemployment, poverty, and inequality), declared bitcoin legal tender in 2021. It positively impacted the country, boosting investments in the area and fostering the local tourism industry.

One of the poorest nations across the globe – the Central African Republic (CAR) – also embraced the asset as an official payment method inside its borders. (CryptoNews)

A billionaire cryptocurrency evangelist may have gotten 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 proselytize the adoption of cryptocurrency. He journeyed to the central bank the next day with the same pitch — but embattled Governor Nandalal Weerasinghe, who’s still working to calm financial mayhem, was having none of it.

“I come to the Central Bank with decentralized currency,” proclaimed Draper, dressed in a Bitcoin tie for the meeting that took place in a teak-paneled room overlooking the sea. 

“We don’t accept,” Weerasinghe said, taking another sip of fizzy ginger beer.

During the meeting, Draper several times referred to what he described as Sri Lanka’s reputation for corruption and argued cryptocurrency was one solution. Colombo could avert graft by keeping perfect records after adopting Bitcoin, he argued.

“Have you seen Sri Lanka in the news? It’s known as the corruption capital,” Draper said. “A country known for corruption will be able to keep perfect records with the adoption of Bitcoin.”

Sri Lanka’s topmost monetary official countered: “Adoption of 100% Bitcoin won’t be a Sri Lanka reality ever.”  

It’s a frostier response than Draper has gotten in some other locations. The tiny island country of Palau in the Pacific made him the founding resident of its digital-residency program, 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 to come up with a rescue plan. Inflation stands at 54.2% and last year the economy contracted 8%, the governor said.

To crypto enthusiasts, that might seem like the perfect place for Bitcoin adoption. One of the main use cases 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 Inc., Skype, Coinbase and Robinhood, made news in 2014 when he purchased seized Bitcoin at a US Marshals Service auction. Bitcoin is hovering in the low $20,000s — but he sees it reaching $250,000 this year.

He kept trying with Weerasinghe. “Does the administration have the guts to do it?” he asked. “What’s the advantage of having your own currency?” 

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 couldn’t have monetary-policy independence.

“We don’t want to make the crisis worse by introducing Bitcoin,” he said.

The meeting lasted 30 minutes.

Source: Bloomberg

–Agencies

Japanese State Minister for Foreign Affairs Takei Shunsuke called on Prime Minister Dinesh Gunawardena today (03) at the Temple Trees to discuss cooperation between the two countries and areas of possible future cooperation.

Shunsuke, who has arrived in Colombo to participate at the 75th Independence Day celebrations, offered warm greetings to Sri Lanka on this important milestone. The Prime Minister thanked the State Minister for the Japanese long-standing assistance to Sri Lanka. Japan has provided US $ 3 million humanitarian assistance last year to procure essential medicines and food through UNICEF and the World Food Programme.

Shunsuke praised Sri Lanka’s commitment to Indian Ocean regions peace and maritime security. He said Japan, as a victim of nuclear attacks, condemn and provocative actions by any nation that could result in a nuclear disaster. Prime Minister Gunawardena said Sri Lanka stand for peaceful solution to any conflict between the nations and is vehemently opposed to use of nuclear weapons.

 

Ceylon Chamber of Commerce Sri Lanka-Pakistan Business Council President S. Deivanayagam and committee members called on High Commissioner of Pakistan in Sri Lanka Maj. Gen (retr.) Umar Farooq Burki HI.

The High Commissioner was briefed on various activities and initiatives being planned by the business council in order to promote trade and investment opportunities between Pakistan and Sri Lanka. In this regard, a delegation visit is being planned in early March 2023 by the business council to explore business opportunities with counterparts in Pakistan.

A detailed discussion was held to strategise a way forward to optimise bilateral trade, within the context of the current economic scenario. The Business Council appreciated the timely and expeditious actions taken by the Government of Pakistan to facilitate imports from Sri Lanka, despite current challenges. 

The High Commissioner underscored that such challenges must be viewed as a catalyst for capitalising on valuable opportunities and that Pakistan would continue to prioritise its relations with Sri Lanka in all facets of cooperation.

The High Commissioner further highlighted that Sri Lanka is considered as a very important regional partner with which Pakistan would like to further enhance its trade, business and economic relations. To this end, he apprised that business visa applications from Sri Lanka are being processed on priority within 24-48 hours by the High Commission, subject to fulfilment of requirements. Pakistan’s Trade and Investment Attaché Asmma Kamal briefed the participants regarding the various high potential sector-specific trade exhibitions being organised in Pakistan by the Ministry of Commerce, Government of Pakistan and Trade Development Authority of Pakistan. She invited Sri Lankan importers, exporters, manufacturers, buying houses and businesses from various sectors to participate in the upcoming four mega trade exhibitions being organised in Pakistan, including Engineering and Healthcare Show (23-25 February in Lahore), Tech Spring Pakistan for ICT Sector (16-18 March in Lahore), International Food and Agriculture Exhibition (4-6 May in Karachi) and the Fourth Edition of the International Textile Exhibition known as TeXpo (26-28 May in Karachi).

The High Commissioner reaffirmed his commitment to support the leadership and members of the Sri Lanka Pakistan Business Council in all possible manner and to continue working closely to promote bilateral trade, joint ventures and economic cooperation between Pakistan and Sri Lanka.