Charlie Munger Calls for Crypto Ban
- A ban on crypto trading in the United States looks highly unlikely. But lawmakers have called for stronger policies.
- Charlie Munger and Warren Buffet believe cryptocurrencies are not real assets.
Charlie Munger, Berkshire Hathaway’s Vice Chairman, has advised the U.S. government to ban cryptocurrencies like China did, noting that a lack of regulation has created a gambling mentality. Munger has not hidden his dislike for cryptocurrencies despite the growth of the industry.
In an op-ed published on Thursday, the 99-year-old finance guru noted that,
A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity. Obviously the U.S. should now enact a new federal law that prevents this from happening.
Munger and his business associate, Warren Buffett, believe that cryptocurrencies are neither real assets nor productive ones. Munger’s most recent remarks come at a time when the cryptocurrency sector is struggling with issues including failed projects and a lack of liquidity, which were made worse by the collapse of FTX. Over $2 trillion was lost from the crypto market’s value in 2022. Both Bitcoin and Ethereum lost over 60% of their value to the bear market.
Munger described crypto as an example of “wild and woolly capitalism.” The investment veteran believes crypto project investors take advantage of investors by offering them coins for “almost nothing.” Munger cited two “interesting precedents” that would inspire the US to take action against crypto.
Munger listed China’s ban on token issuance and derivatives for virtual currencies. He also referenced the English parliament’s ban on all public trading in new common stocks in the 1700s. Munger said the English ban was by “far the biggest national contribution to the march of civilization as it led strongly in both the Enlightenment and the Industrial Revolution and, to boot, spawned off a promising little country called the United States.”
China infamously banned the creation and trading of cryptocurrencies in 2021. But such a ban looks highly unlikely in the United States. However, lawmakers in the country are exploring regulatory options.
I have covered some exciting stories in my career as a journalist and find blockchain-related stories very intriguing. I believe Web3 will change the world and want everyone to be a part of it.
