Berkshire Hathaway VC: US Should Emulate China’s Crypto Ban

© Reuters Berkshire Hathaway VC: US Should Emulate China’s Crypto Ban

• Charlie Munger opines that the United States should ban cryptocurrencies following regulatory insufficiency.
• Wall Street Journal commenters express agreement and aversion to Munger’s opinion piece.
• The newest opinion piece continues a chain of crypto-skepticism from Munger.

On February 1st, 2023, Berkshire Hathaway (NYSE:BRKa) (BRK) vice chairman, Charlie Munger, published an opinion piece in the Wall Street Journal (WSJ) in which he opined that the United States should ban cryptocurrencies.

The VC has attributed the adoption and rise of cryptocurrencies to a lack of government regulation, asserting that the U.S. should enact new federal laws and eliminate the gray areas in which this “wild and wooly capitalism” has been unraveling.

The latest opinion piece by Munger is the newest in a series of skeptical opinions by the VC, who has a reputation for his criticism of cryptocurrencies.

A Serial Skeptic

According to Munger, “cryptocurrency is not a currency, not a commodity, and not a security,” but rather a “gambling contract with a nearly 100% edge for the house.”

In his WSJ commentary, he references two historical precedents which, according to him, could lead the US down a similar path of “sound action.”

Munger’s first precedent includes the Chinese government’s ban on cryptocurrencies, stating that China concluded that cryptocurrencies would harm its people more than benefit them.

Secondly, Munger referenced the occurrence in the early 1700s when England was in a depression after a promotional plan failed. The English Parliament reportedly banned all public trading in new common stocks for about 100 years. At the time, England made significant contributions to the Enlightenment and the Industrial Revolution and spawned a new country called the United States, as explained by Munger.

The opinion piece has accumulated close to 500 comments from WSJ subscribers in less than 24 hours since it was published.

Stirring a Conversation

WSJ commenters are expressing both aversion and agreement with the opinion piece by either dissecting Munger’s historical precedents and statements or resonating with them.

The comment with the most community likes thus far was written by Mike Konczal, who criticized Munger’s opinion by asking:

“Governments that run lotteries are going to ban crypto because it is gambling?”

Another community member, Reddy D, supports the commentary made by Munger, saying the U.S. should ban crypto, and asserts that:

“Crypto has no benefit to society, created many bad actors, its global gambling.”

The most recent commentary on Munger’s WSJ opinion piece appears to agree with his claims that the U.S. government either has too little regulation over cryptocurrencies or that cryptocurrency trading is a high-risk gamble.

On the Flipside

• The crypto market has seen notable increases across the board following the Federal Reserve’s most recent FOMC meeting.
• It remains to be seen whether the United States government will impose complete bans or regulations on cryptocurrency activity.

Why You Should Care

Banning cryptocurrencies in the United States could have deep-reaching consequences on the global economy, potentially reducing foreign investment, impacting international trade, and continuing the ban cycle to more countries.

Read more about Charlie Munger’s prior commentary on China’s crypto ban:

Billionaire Investor Charlie Munger Wishes Crypto Was Banned and Admires China’s Stance

Read more about crypto regulation in the United States:

Next US Congress to Legislate on Stablecoin Regulation

See original on DailyCoin