COLOMBO, Sri Lanka – American billionaire Tim Draper recently visited Sri Lanka to pitch the idea of adopting Bitcoin as a legal tender to fight corruption and hyperinflation. However, the proposal was rejected by Sri Lankan central bank Governor Nandalal Weerasinghe who believed that it would only worsen the country’s economic situation.
Draper met with President Ranil Wickremesinghe and Governor Weerasinghe to recommend the use of Bitcoin as a solution to the island country’s financial problems. “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,” Draper said in his pitch.
However, Governor Weerasinghe was not convinced. He replied, “Adoption of 100% Bitcoin won’t be a Sri Lanka reality ever.” The central bank governor believes that having Sri Lanka’s own fiat currency is critical for monetary-policy independence and would ensure efficient inclusion and disbursement of electronic welfare payments.
“We don’t want to make the crisis worse by introducing Bitcoin,” Governor Weerasinghe concluded.
On the other hand, software analytics company MicroStrategy, co-founded by Michael Saylor, plans to continue offering Bitcoin trading services despite incurring an unrealized loss of $1.3 billion in 2022. During a recent earnings call, the company’s chief financial officer, Andrew Kang, said that they may consider pursuing additional transactions that may take advantage of the volatility in Bitcoin prices or other market dislocations consistent with their long-term Bitcoin strategy. As of Dec. 31, 2022, MicroStrategy held 132,500 Bitcoins worth $1.84 billion.
In conclusion, while some countries are exploring the possibility of adopting Bitcoin as a legal tender, Sri Lanka remains steadfast in its stance against the use of decentralized currency. The country believes that having its own fiat currency is crucial for monetary policy independence and efficient inclusion and disbursement of electronic welfare payments.