(Kitco News) As the crypto market gets a boost from the latest surge in risky assets, Berkshire Hathaway Vice Chairman Charlie Munger says the US should follow China’s actions and ban the crypto market.
“It’s not currency. It’s a gambling contract with an almost 100% house advantage,” Munger wrote in an op-ed published Wednesday in The Wall Street Journal.
The gambling mentality fuels the lack of regulation in the sector, he said.
Munger noted that in recent years, privately held companies have issued thousands of new cryptocurrencies in the U.S., which have gone public late without any prior government disclosure approval.
“Such wretched excess has continued because there is a gap in regulation,” he noted. “Cryptocurrency is not a currency, it is not a commodity or a security. Instead, it is a gambling contract with an almost 100% house advantage, entered into in a country where gambling contracts have traditionally only been regulated by states competing in relaxation. Apparently the US should now pass a new federal law that prevents that from happening.”
Munger then pointed to China and England as examples to follow. In 2021, the People’s Bank of China (PBOC) banned all cryptocurrency transactions. “[China] he wisely concluded that it would do more harm than good,” Munger noted.
Another model was England, which in the early 18th century banned all public trading of new common stocks for approximately 100 years.
“England was reacting to the terrible depression that followed the failure of a publicity scheme to make huge profits by using slow sailing ships to trade with very poor people halfway around the world,” Munger wrote. “And, in those 100 years, England made by far the greatest national contribution to the march of civilization as it led the way strongly in the Enlightenment and the Industrial Revolution and, in addition, gave birth to a promising little country called the United States.”
Munger concluded that after banning cryptocurrencies, the US should “thank the Chinese Communist leader for his shining example of common sense.”
The vice president of Berkshire Hathaway is known for his harsh criticism of the crypto market.
At the time of publication, the crypto space was seeing a recovery, with total market capitalization rising to $1.13 trillion, up 4.5% on the day. Bitcoin traded near $24,000 and Ethereum near $1,700, with the entire space mostly in the black.
This comes after massive losses in 2022 that saw the crypto market lose more than $2 trillion, exacerbated by the fall of the FTX exchange.
Waiver: The views expressed in this article are those of the author and do not necessarily reflect the views of the author Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither did Kitco Metals Inc. neither the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation of any exchange of goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for losses and/or damages arising from the use of this publication.