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.