Speaking at the World Economic Forum in Davos today, South Africa’s central bank governor, Lesetja Kganyago, said they don’t buy into the hype of bitcoin as a reserve asset, an idea popularized by US ‘crypto president’ Donald Trump.
Surrounded by top crypto executives at the Davos event, Kganyago reportedly compared the idea of holding bitcoin in reserves to stockpiling beef or apples.
Naturally, his comments started debate during a panel filled with big names like Coinbase CEO Brian Armstrong, who couldn’t stop talking about the “Trump effect” on crypto. Bitcoin hit an all-time high near $110,000 following Trump’s election.
“The Trump effect cannot be denied here. 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,” Brian said.
Global crypto regulations at risk because of Trump
Kganyago, meanwhile, said: “I have a significant problem with a lobby that says governments should hold this asset or 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, or mutton reserves, or apple reserves? Why Bitcoin? There’s nothing special about it.” Oof!
The South African banker didn’t stop there. He called out the $119 million spent by crypto elites like Brian himself and Winklevoss twins on lobbying pro-crypto U.S. congressional candidates.
Reportedly, he believes that this kind of influence will lead to a global “regulatory capture,” where rules are shaped by profits instead of fairness.
Brian was not having it. He defended the lobbying efforts as part of a functioning democracy. “This is democracy working,” he said, insisting that crypto advocates are simply engaging with policymakers like any other industry. Hint, hint: Wall Street since its creation.
Trump’s memecoin makes thing worse
To make matters worse, just two days before his inauguration, president Trump announced the launch of his very own memecoin in a shocking plot twist. According to its website, 80% of the memecoin’s total supply is owned by Trump’s firm, raising ethical questions from Kganyago.
Nic Carter, founding partner at Castle Island Ventures and a Trump supporter, told Politico that: “They’re plumbing new depths of idiocy with the memecoin launch,” he said, calling the move “absolutely preposterous.”
The fear is simple: if investors lose big on the coin, it could tarnish both Trump’s reputation and the entire crypto industry.
Democrats have already started. Rep. Sean Casten, a proud crypto hater, has accused Trump of just trying to enrich himself at the expense of his supporters. “He continues to make clear he will not let detriments to his supporters or ethics stand in the way of enriching himself,” Casten said.
Despite the backlash, Trump’s sons, Donald Trump Jr. and Eric Trump, have launched a family crypto venture, called World Liberty Financial.
And lawmakers are busy forming new subcommittees and working groups focused on digital assets, working to pass legislation that protects crypto firms from enforcement actions seen under the previous administration.
Brian believes this could boost innovation, attract traditional investors and make America the crypto capital of the world, but as South Africa’s Kganyago warned, the question remains: at what cost?
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