key takeaways
- Berkshire Hathaway Vice President Charlie Munger has called on the United States to ban cryptocurrencies altogether.
- The 99-year-old criticized the crypto industry for some of its predatory tokenomic practices.
- In 2021, Munger called cryptocurrencies “disgusting and contrary to the interests of civilization.”
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Billionaire Charlie Munger, 99, believes that a lack of regulation in the cryptocurrency industry is causing private companies to release cryptocurrencies with predatory tokenomics. He’s not wrong, but his solution (ban all cryptocurrencies in the US) seems a bit drastic.
Following China’s “splendid example”
Charlie Munger still doesn’t like cryptocurrencies.
Berkshire Hathaway vice president, 99 published an opinion piece in the Wall Street Journal yesterday in which he called for the United States to ban cryptocurrencies entirely.
“A cryptocurrency is not a currency, nor a commodity, nor a value. Instead, it is a betting contract with a nearly 100% house edge, entered into in a country where betting contracts are traditionally regulated only by laxly competing states,” Munger said. He criticized crypto projects for selling early tokens to venture capitalists before releasing only a small part of the token supply to the public, a predatory scheme that allows seed-round investors to dump their holdings on retail investors.
“Such a deplorable excess has occurred because there is a regulatory gap,” Munger asserted, citing the need for prior government approval of disclosures before a private company issues a new coin. He then urged the United States to follow China’s lead and simply ban cryptocurrencies, stating that the nation should thank the “Chinese communist leader.” [Xi Jinping] for his splendid example of common sense.”
It is not the first time that the billionaire has expressed his opinion on cryptocurrencies; in fact, the op-ed may well mark Munger’s most reasonable criticism of the industry to date. In May 2021, Munger fixed that the asset class was “disgusting and contrary to the interests of civilization,” adding that he did not “welcome a currency that is so useful to kidnappers and extortionists etc.”
Munger’s famous business partner, Berkshire Hathaway Chairman and CEO Warren Buffett, has also expressed his crypto skepticism, albeit in milder terms. “The idea [that Bitcoin] It has great intrinsic value, it’s a joke in my opinion,” he said in a 2018 CNBC interview.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
