South African central bank chief criticises crypto lobbying efforts

Lesetja Kganyago, the governor of the South African Reserve Bank (SARB), strongly criticised crypto lobbyists during a panel discussion at the World Economic Forum in Davos.

He specifically challenged the idea of including Bitcoin (CRYPTO:BTC) in national reserves, questioning the rationale behind this focus. 

"I would have a significant problem with a lobby that says governments should hold this asset or hold that asset," Kganyago remarked.

His comments were made in response to Coinbase CEO Brian Armstrong, who suggested that a potential return of Donald Trump to the presidency could draw significant investment into the cryptocurrency sector, particularly Bitcoin.

Armstrong emphasised the importance of having the leader of the world’s largest economy endorse Bitcoin as a reserve asset.

In contrast, Kganyago pointed out Bitcoin’s lack of historical significance when compared to traditional reserve assets like gold.

"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?" Kganyago posed the question rhetorically, also expressing concerns over "regulatory capture," warning that intense lobbying efforts could lead to regulatory agencies being unduly influenced by the industries they are supposed to regulate.

He highlighted how crypto firms financially supported political candidates in the U.S. who were sympathetic to their interests, which could ultimately skew regulatory frameworks in favor of these industries.

“If regulation is going to be established through the power of money, then we have a problem,” Kganyago warned.

Armstrong responded by asserting that such lobbying efforts reflect healthy democratic engagement, suggesting that it demonstrates active participation between industry and political processes.