The Governor of the South African Reserve Bank, Lesetja Kganyago, has warned governments about lobbyists pushing for Bitcoin to be included in strategic reserves as an asset to be held like gold.
Speaking at the ongoing World Economic Forum in Davos, on Tuesday, the governor pointed out that, unlike gold, Bitcoin has no history and is as worthless as platinum or coal to a national reserve.
Per Techcentral, Kganyago said, “I would have a significant problem with a lobby that says governments should hold this or that asset without consideration for what the strategic intent of the government is. There is a history to gold, but if we now say Bitcoin, then what about platinum or coal? Why don’t we hold strategic beef reserves, or mutton reserves, or apple reserves? Why Bitcoin?”
Kganyago’s remark comes days after President Donald Trump endorsed Bitcoin as a strategic asset, outlining plans to create a U.S. Bitcoin reserve to enhance economic stability.
Strategic reserves are stockpiles of essential resources governments maintain to prepare for unforeseen disruptions or emergencies, such as natural disasters, conflicts, or economic crises.
Responding to the governor’s comments, The Chief Executive Officer of popular cryptocurrency exchange platform, Coinbase, Brian Armstrong, argued that Bitcoin is an even better form of money than gold because it has been proven to be scarce, adding that it is also more portable and divisible.
Armstrong, who was on the same WES panel as Kganyago, asserted that “[Bitcoin] has higher utility and has been the best-performing asset of the last 10 years. So, for a store of value, it is going to be important for governments to hold this over time. It may start out only as 1% of their reserves, but over time it will come to be equal to or greater than their gold reserves.”
In 2022, South Africa’s Financial Sector Conduct Authority (FSCA) classified crypto assets as financial products under the Financial Advisory and Intermediary Services (FAIS) Act, bringing them under existing financial regulations. However, while cryptocurrency is legal and freely traded in Southern Africa, there is currently no comprehensive legal framework governing its activities. As such, Kganyago’s views on Bitcoin could reflect the relationship between the county’s regulators and emerging technology.