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South Asian country Sri Lanka is battling its worst economic meltdown; citizens are suffering for the basics. Inflation stood at 54.2%, while the economy shrunk by 8%. A billionaire cryptocurrency gospeler got a sour experience in the country while proposing Bitcoin as the solution.
Tim Draper in Sri Lanka
Tim Draper, a Silicon Valley investor, was in the country shooting an episode of “Meet the Drapers” TV show with local entrepreneurs; he also met President Ranil Wickremesinghe on Tuesday, recommending the adoption of cryptocurrency.
The next day Tim went to the central bank, prompting a similar pitch, but Governor Nandalal Weerasinghe who is fighting a financial civil war responded in repudiation. Draper said that he visited the central bank wearing a bitcoin tie and in a teak-paneled room overlooking the ocean during the meeting. Where Weerasinghe said, “We don’t accept”.
It is an ice-cold response for Draper compared to other locations. Earlier in Palau, a tiny island nation in the Pacific, made him the founding resident of their digital-residency program.
Sri Lanka – Fighting a Finance Civil War
After a years-long civil war with LTTE ended in 2009, the country took massive international loans to pay for war expenses. They failed to repay with depleting foreign reserves; Covid-19 took away tourism, their main source of foreign reserves. One bad decision to shift to organic farming by completely banning chemical fertilizers took away tea export, another pillar of the reserve. These and many other factors eventually caused the economy to collapse in June 2022. The country is under more than $35.9 billion in debt.
Citizens then rioted to the streets, forcing the president to flee the country and later resign. The massively debt-stricken nation is in talks with international creditors for help, hoping that the International Monetary Fund could devise a rescue plan.
Can a dose of Cryptocurrency cure the nation?
Many crypto enthusiasts on the planet feel the country could be a perfect place for Bitcoin adoption. A major use case could be that crypto could be a store of value independent of changes made by the central bank or government policy. Plus, giving citizens and the country a chance to be part of the next revolution. Tim also mentioned El Salvador, the pioneer in Bitcoin adoption, as a legal tender, but with the country’s brilliant plan seeming to be falling apart, it’s just a cautionary reference.
During the meeting with the governor, Draper argued that the adoption could solve the nation’s corruption problem, which Srilanka has created a bad image. Proper maintenance of perfect, intangible, and secure records could be helpful. But Weerasinghe argued that a country without its currency could never have monetary-policy independence. Further adding that:
“We don’t want to make the crisis worse by introducing Bitcoin.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
