Can Using Crypto will Help Sri Lanka Overcome Crisis
Sri Lanka is facing its worst economic crisis which has led to unprecedented levels of inflation and zeroes to no foreign exchange reserves. Along with that, there is a shortage of medical supplies and an increase in the prices of basic commodities. One of the main reasons for this crisis is money creation which is happening all over the world, when you print more money and more money is in circulation there will be inflation. And then there was Covid which reduced the tourism on the island which has made the matter worst.
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Some of the investors in Sri Lanka who have already invested in crypto some time back are just able to make th meets end whereas whoever was earning in the local currencies are struggling because of the increased prices as well as there a is shortage of basic need item. Now the way forward looks scary as the Sri Lankan government has to change a lot of things to come out of this crisis.
Can using Crypto will help?
If the Sri Lankan government starts accepting the cryptocurrency for all the tours and travels as well as regulating it to the extent that every individual can buy it then yes, it will help Sri Lanka to come out of the crisis.
When the government started accepting the cryptocurrency the money inflows will increase to the island nation from the tourist, they can run some kind of campaigns to ask people to come and travel using their crypto.
Next, if they bring up some friendly crypto policies more and more companies can start putting up their bases in the country and thus in some way there will be jobs as well as more companies will try to invest there.
Leveraging Blockchain technology can help the government to tackle the ongoing supply chain crisis and thus will help streamline the commodity prices.
The only question is what it takes the government to do it. We know these crises are always man-made and only good governance can solve them. So if the government is ready to use Crypto then yes, it can help Sri Lanks to overcome its crisis.
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We've seen BTC do it's job in other failing economies and it will likely be a stop gap there as well.
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By the way, it's more about sovereign debt vulnerabilities, it has nothing to with a banking failure that happened in the year 2008. So the underlying problem is different. It has been on the receiving end because due to pandemics the tourism industry took a hit, and to aggravate the situation and for political gains, the incumbent Govt cut the taxes at a time when the whole world was reeling under the pandemic.
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