Charlie Munger says the U.S. should follow in China's footsteps and ban cryptocurrencies

Berkshire Hathaway Vice Chairman Charlie Munger urged the U.S. authorities to prohibition cryptocurrencies similar China, saying a deficiency of regularisation enabled wretched excess and a gambling mentality.

"A cryptocurrency is not a currency, not a commodity, and not a security," the 99-year-old Munger said successful an op-ed published successful the Wall Street Journal Wednesday evening.

"Instead, it's a gambling declaration with a astir 100% borderline for the house, entered into successful a state wherever gambling contracts are traditionally regulated lone by states that vie successful laxity," Munger said. "Obviously the U.S. should present enact a caller national instrumentality that prevents this from happening."

Munger, on with his concern spouse Warren Buffett, person been longtime cryptocurrency skeptics, arguing that they are not tangible oregon productive assets. Munger's latest comments came arsenic the crypto manufacture was plagued with problems from failed projects to a liquidity crunch, exacerbated by the autumn of FTX, erstwhile 1 of the world's largest exchanges.

The cryptocurrency marketplace lost much than $2 trillion successful worth past year. The terms of bitcoin, the world' largest cryptocurrency, plunged 65% successful 2022 and it has rebounded astir 40% to commercialized astir $23,824, according to Coin Metrics.

The renowned capitalist said successful caller years, privately owned companies person issued thousands of caller cryptocurrencies, and they person go publically traded without immoderate governmental pre-approval of disclosures. Some has been sold to a promoter for astir nothing, aft which the nationalist buys successful astatine overmuch higher prices without afloat knowing the "pre-dilution successful favour of the promoter," Munger said.

Munger listed 2 "interesting precedents" that whitethorn usher the U.S. into dependable action. Firstly, China has strictly prohibited services offering trading, bid matching, token issuance and derivatives for virtual currencies. Secondly, from the aboriginal 1700s, the English Parliament banned each nationalist trading successful caller communal stocks and kept this prohibition successful spot for astir 100 years, Munger said.

"What should the U.S. bash aft a prohibition of cryptocurrencies is successful place? Well, 1 much enactment mightiness marque sense: Thank the Chinese communist person for his splendid illustration of uncommon sense," Munger said.

(Read the afloat portion successful the WSJ here.)