Central Bank Governor of Sri Lanka Rejects Bitcoin (BTC)

  • Resistance in Sri Lanka
  • Revamping the economy through Bitcoin

Tim Draper, an American investor billionaire, had a suggestion to introduce Bitcoin to Sri Lanka, whose economy has deteriorated and is facing bankruptcy. He was suggesting this so that it can help tackle the economic crisis that Sri Lank is currently facing.

In Draper’s description, he stated that Sri Lanka is a corruption-affected nation and backed up Bitcoin as the solution to the problem. Draper had set up meetings with the President earlier this week and local investors and entrepreneurs to try and advocate for cryptocurrency adoption in the economically ailing country.

However, he also had a meeting with Central Bank Governor Nandalal Weerasinghe, of which the efforts proved futile regarding introducing Bitcoin in Sri Lanka.

In Draper’s opinion, cryptocurrency is a good store of value and is not subjected to any Central-banks policies. Nandalal claimed that if Bitcoin were introduced, it would make the situation direr, and thus they would not take that route with immediate effect.

That may have been due to worries about monetary freedom through the Bitcoin introduction. However, the Central Bank’s Governor stated that they would effectively use other financial and technological avenues to ensure that funds were distributed inclusively to everyone.

Resistance in Sri Lanka

Sri Lanka encountered one of the worst economic crises last year; this led to a shortage of food and other supplies, such as fuel, in the country. The crisis resulted in President Gotabaya Rajapaksa resigning just after fleeing the country.

The government has now held talks with lenders such as India, China, and Japan to replan its debt structure under IMF’s laws and regulations; the debt is supposed to be serviced by 2027. In a report, the Governor indicated that economic growth had dropped to 8% compared to the previous year, and inflation had hit highs of 54.2%.

Revamping the Economy Through Bitcoin

Through decentralization, Bitcoin does not rely on a given authority or a bank; this increases transparency and reduces the risk of corruption in transactions since they are correctly recorded. It provides financial access in a developing country or one with an ailing economy to people who cannot access regular traditional banking services.

In times of economic uncertainty, Bitcoin’s decentralized nature and scarcity bring stability to an economy. The local banks have higher transactional fees than Bitcoin transactions; thus, implementing them will reduce costs for individuals and organizations.

If bitcoin is implemented, it has the potential to bring new employment opportunities in areas like blockchain development, mining, and crypto exchanges. It is worth noting that Bitcoin adoption or other in any setting may be faced some challenges, i.e., security issues, laws, and regulations.