Berkshire Hathaway’s Charlie Munger wants America to take a page from China and ban cryptocurrencies.
In a Wall Street Journal opinion piece Wednesday (Feb. 1), the billionaire vice chairman of the conglomerate decried the “wretched excess” of the crypto market.
“A cryptocurrency is not a currency, not a commodity, and not a security,” he wrote. “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.”
Munger argued China offers the U.S. a way forward, saying that the country banned cryptocurrencies after determining “they would provide more harm than benefit.”
China instituted that ban in 2021, saying that it wanted to protect national security and social stability. The government cited the use of cryptocurrencies in illegal activities like gambling, money laundering and pyramid schemes.
It’s not the first time Munger, who will turn 100 next year, has voiced his contempt for crypto. (His business partner Warren Buffet is of the same mindset, once referring to bitcoin as “rat poison squared.”)
In November, Munger gave an interview with CNBC in which he called cryptocurrencies a mix of fraud and delusion.
“That’s a bad combination,” he said. “I don’t like either fraud or delusion. And the delusion may be more extreme than the fraud.”
Those comments came in the wake of the collapse and bankruptcy of the FTX exchange, which has since led to calls for the government to take action on the crypto sector.
Much of that conversation has centered around regulating, and not banning, cryptocurrencies. Earlier this week, the Biden administration called on Congress to speed up its crypto enforcement efforts as the White House unveiled a “roadmap” for dealing with the sector.
In that document, the White House warns against “deepening ties between cryptocurrencies and the broader financial system,” even going so far as to call the prospect a “grave mistake.”
That’s a departure from the views expressed by private sector executives in interviews with PYMNTS. They say they are eager to see crypto realize value-based integrations into future product offerings of long-standing, regulated financial institutions
Driving the administration’s cautions is the belief that “the new digital economy should work for the many, not just the few,” and that there aren’t proper safeguards to protect American consumers from fraud or loss.
By “greenlighting” crypto’s mainstream integration, Biden officials warn that traditionally stable institutions like pension funds that invest across the digital asset marketplace might unwittingly expose their retirement holdings or other critical funds to unacceptable levels of risk.