SARB governor opposes crypto lobbyists influencing government decisions

The governor of the South African Reserve Bank, Lesetja Kganyago, has warned that cryptocurrency groups lobbying to influence elections and government decisions in the United States set a dangerous precedent.  

He also dismissed calls for governments to hold strategic reserves in bitcoin, saying cryptocurrencies are no different from other commodities as reserve assets. 

The details 

• Kganyago, speaking during a panel session at the World Economic Forum in Switzerland, said that crypto lobbyists trying to influence financial regulations can lead to “regulatory capture.” 
• Per a Reuters report, large crypto companies spent more than $119 million to support pro-crypto congressional candidates in the US.  
• These companies, including Coinbase and Ripple, played the long game, hoping that the move would pave way for the easy passing of crypto-friendly legislation. 
• Kganyago expressed displeasure at this, adding that governmental policies and regulations influenced by money in such a manner spell problems. 
• He watered down claims for governments to hold bitcoin reserves, saying that the digital asset has no advantage over any other commodity such as beef, apples and mutton. 
• In addition, Kganyago said that these bitcoin reserve calls are nothing more than the result of crypto lobbying groups trying to influence government decisions. 

What was said 

• Kganyago, commenting on the activities of lobbyist groups to influence decisions, said: 

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

• On bitcoin reserve calls, he said: 

“I would have a significant problem with a lobby that says governments should hold this asset or hold that asset. 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, mutton reserves, or apple reserves? Why Bitcoin?” 

Zoom out

• South Africa currently holds the most advanced crypto legislations on the continent.
• In 2022, the country recognized cryptocurrencies as financial assets and exchanges as financial service providers, effectively legalizing the asset class. 
• It has since issued licenses to more than 240 crypto firms operating in the country. 
• Kganyago’s remarks highlight that while African nations are gradually embracing crypto through recently enacted legislation, their approach remains more cautious compared to the enthusiasm seen in Western countries.
• African regulations often mirror Western approaches, but whether pro-crypto legislation in the West will inspire similar shifts across the continent remains uncertain.