South African Central Bank Governor Criticizes Crypto Lobbying Amid Trump’s Pro-Crypto Stance at Davos

At the World Economic Forum in Davos, South Africa’s central bank governor, Lesetja Kganyago, took aim at the cryptocurrency industry’s lobbying of U.S. policymakers, rejecting the notion of bitcoin as a viable reserve asset. Kganyago argued that treating bitcoin as a strategic asset made no more sense than holding reserves of commodities like beef or apples, while also cautioning against undue influence from industry players on regulatory decisions.

The panel event, which included prominent cryptocurrency leaders, saw contrasting perspectives. Coinbase CEO Brian Armstrong praised Donald Trump’s presidency for its perceived pro-crypto stance, highlighting the surge in bitcoin prices to all-time highs above $100,000 following Trump’s election. Armstrong described Trump’s approach as a game-changer. “The Trump effect cannot be denied here,” he said. “To have the leader of the largest GDP country in the world come out undeniably and say that he wants to be the first crypto president… This is unprecedented.”

Armstrong also expressed enthusiasm for Trump’s proposed creation of a U.S. government bitcoin stockpile, calling it a significant step for the cryptocurrency sector. However, Kganyago pushed back against the idea, saying it suggested excessive sway by lobbyists. “I would have a significant problem with a lobby that says governments should hold this asset or hold that asset,” Kganyago said. “There is a history to gold. There was once a gold standard… If we now say, ok, bitcoins. What about platinum? What about coal? Why don’t we hold strategic beef reserves, or mutton reserves, or apple reserves? Why Bitcoin?”

The governor also criticized the growing financial influence of the cryptocurrency industry on U.S. politics. Major players like Coinbase and Ripple spent over $119 million supporting pro-crypto congressional candidates. Kganyago warned, “If regulation is going to be established through the power of money, then we have a problem.”

Armstrong, however, defended the role of financial contributions, describing them as an expression of democracy. “The impact of pro-crypto groups in the U.S. showed democracy working,” he said.

Jennifer Johnson, CEO of Franklin Templeton, weighed in, noting a gap between traditional finance and the rapidly expanding cryptocurrency sector. “It’s literally like two parallel universes,” she said, emphasizing the need for clear regulatory frameworks to give institutional investors greater confidence in the market.

Despite Trump’s omission of cryptocurrencies in his recent inauguration speech, Armstrong insisted that plans for a national bitcoin reserve remain active. “Plans for a bitcoin reserve are alive and well,” he said.

The optimistic tone among crypto executives at Davos contrasted sharply with the industry’s struggles in 2022, a year marked by high-profile bankruptcies and scandals that left millions of investors facing significant losses. Last week, crypto leaders celebrated Trump’s inauguration with a gala in Washington, reflecting renewed hope for the sector’s future.

By fLEXI tEAM