The Crypto Ban Debate: Munger’s Call to Action

Recently, Charlie Munger, the 99-year-old vice chairman of Berkshire Hathaway, has stirred the crypto pot again. In an op-ed for a prominent publication, he suggested the U.S. should take a cue from China and impose a blanket ban on cryptocurrency. Munger described crypto as a “gambling contract” with a nearly unbeatable edge for the house. So basically, he’s equating investing in crypto with a trip to Vegas—only with far more drama and less Elvis.

The Case Against Cryptocurrency

Munger argues that cryptocurrency doesn’t fit neatly into any of the standard financial categories—namely currency, commodity, or security. He believes that the best course of action is to pull a page from China’s playbook, which imposed a crypto ban in September 2021. He even went as far as to thank the Chinese leadership for their “uncommon sense.” Talk about generosity!

Mixed Reactions from the Crypto Community

As you can imagine, crypto enthusiasts did not take Munger’s remarks lying down. Responses ranged from bewilderment to outright disdain. One prominent voice from the NFT space quipped that the battle lines are being drawn: “Freedom or tyranny. Non-custodial wallets are the hill we can’t surrender.” Clearly, many believe that Munger has underestimated the decentralized nature of cryptocurrency.

The Reality Check: Crypto’s Resilience

Despite China’s ban on cryptocurrency, it hasn’t entirely worked out as planned. Ironically, they’ve maintained their position as the second-biggest Bitcoin miner in the world. Possessing crypto is, somewhat surprisingly, still legal for Chinese residents. It’s almost as if crypto has the magical ability to persist, no matter how hard someone tries to shove it under the rug. It’s like trying to ban the color pink—good luck with that!

Gambling vs. Crypto: A Curious Comparison

If Munger sees crypto as a form of gambling, it’s worth mentioning that gambling is very much alive and well under U.S. federal law. Consider this: U.S. casinos raked in a record-breaking $54.93 billion revenue in 2022, with gamblers essentially treating their wallets like piñatas. Even though Munger criticizes crypto as risky, the gambling industry continues to thrive despite its potential for huge losses. One has to wonder if Munger would prefer gambling to be banned too!