Key Points
- South Africa’s Kganyago says bitcoin is no better than beef.
- Coinbase CEO believes Trump’s presidency boosts crypto investments.
- Crypto lobbying risks influencing regulation unfairly, Kganyago warns.
During a panel discussion at the World Economic Forum’s annual meeting on Tuesday, Lesetja Kganyago, the governor of South Africa’s central bank, blasted the lobbying efforts of the cryptocurrency business. Bitcoin, according to Kganyago, is no more sensible as a reserve asset than commodities like apples or beef.
Bitcoin lobbying faces sharp criticism from South African central banker
Other panelists, who were surrounded by cryptocurrency businessmen who were encouraged by Donald Trump’s presidency, voiced optimism about the industry’s future. According to Brian Armstrong, CEO of Coinbase, Trump’s reelection might draw a lot of capital to the cryptocurrency sector. He pointed out that after Trump was elected, bitcoin shot to record highs of over $100,000.
“Here, the Trump effect is undeniable,” Armstrong stated. It is unheard of for the head of the nation with the highest GDP in the world to publicly declare his desire to become the first president of cryptocurrency.
As stated by Reuters, Trump’s plan to establish a bitcoin reserve for the US government was also hailed by Armstrong. Kganyago, however, disapproved of the concept, claiming it showed excessive lobbying influence.
Kganyago stated, “I would have a big problem with a lobby that says governments should hold this asset or that asset.” “Gold has a past; the gold standard existed at one point. Now that we’ve said, “All right, bitcoins,” what about platinum? How about coal? Why do we not have strategic stores of apples, mutton, or beef? Why Bitcoin?
Citing the lobbying activities of the bitcoin business, Kganyago also cautioned about the dangers of regulatory takeover. Together, businesses like Coinbase and Ripple have contributed over $119 million to help pro-crypto congressional candidates in the US.
Kganyago stated, “We have a problem if regulation is going to be established through the power of money.”
Armstrong retorted that “democracy working” was demonstrated by the impact of pro-crypto organizations in the United States.
Debate intensifies over U.S. government bitcoin reserve proposal
Trump declared plans to create a national bitcoin reserve in July 2024, and cryptocurrency investors have voiced faith that he will follow through on those promises. Armstrong claimed that ideas for a bitcoin reserve were still “alive and well,” despite the fact that bitcoin prices fell Monday after Trump’s inauguration speech omitted any reference of cryptocurrency.
In contrast to 2022, which was characterized by bankruptcies at significant cryptocurrency companies that revealed massive fraud and left millions of investors with significant losses, the optimistic attitude among crypto CEOs represented a dramatic shift. Crypto leaders threw a ball in Washington last week to commemorate Trump’s inauguration, indicating a resurgence of hope in the industry.
