Charlie Munger says U.S. should follow China's lead, ban cryptocurrencies

Asian Tech Press (Feb 3) -- Charlie Munger, Warren Buffett's right-hand man and vice chairman of Berkshire Hathaway, said the U.S. should follow China's lead and ban cryptocurrencies.

"A cryptocurrency is not a currency, not a commodity, and not a security," Munger said in an op-ed published Thursday in The Wall Street Journal.

"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," the 99-year-old prominent investor said. "Obviously the U.S. should now enact a new federal law that prevents this from happening."

Munger's latest comments come as the crypto industry is plagued by problems ranging from failed projects to a liquidity crunch, a situation exacerbated by the collapse of FTX, once one of the world's largest crypto exchanges.

The veteran investor cited two "interesting precedents," one of which relates to China, a powerful U.S. rival. China has strictly banned services offering trading, order matching, token issuance and derivatives of virtual currencie, which Munger believes may guide the U.S. to take "sound action".

Munger wrote, "What should the U.S. do after a ban of cryptocurrencies is in place? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon sense."

Munger and his business partner Warren Buffett have long been skeptical of cryptocurrencies, arguing that they are not tangible or productive assets.

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