Elon Musk says cryptocurrency regulators should 'do nothing' and 'let it fly'
Musk's comments follow SEC chairman Gary Gensler's call for more US crypto regulation, China's crackdown on crypto transactions and mining
Slatestone Wealth's Chief Market Strategist Kenny Polcari reacts to China’s central bank declaring all transactions involving Bitcoin and other virtual currencies illegal.
Tesla CEO Elon Musk said on Tuesday that governments should stay out of regulating the cryptocurrency market.
"It is not possible to, I think, destroy crypto," Musk told New York Times columnist Kara Swisher during the Code Conference in Beverly Hills, California. "But it is possible for governments to slow down its advancement."
Instead, he believes that regulators should simply "do nothing" and "just let it fly."
BITCOIN MINERS EYE NUCLEAR POWER AS ENVIRONMENTAL CRITICISM MOUNTS
His comments come as the chairman of the Securities and Exchange Commission, Gary Gensler, has referred to cryptocurrencies as the "Wild West" of digital assets and has pushed for greater regulation in the United States. Meanwhile, China launched its own crypto crackdown last week, declaring all transactions and mining activities in the country illegal.
Musk weighed in on China's ban, noting that part of it likely has to do with the country's "significant electricity generation issues."
"A lot of South China is having random power outages because the power demand is higher than expected," he explained. "Crypto mining might be playing a role in that."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 320.72 | +9.54 | +3.07% |
Musk himself warned of the "insane" electricity consumption of Bitcoin mining earlier this year, and reversed course on accepting the world's largest cryptocurrency as an alternative form of payment for Tesla vehicles due to its heavy dependance on fossil fuels. However, the electric vehicle maker still holds Bitcoin on its balance sheet after purchasing $1.5 billion worth of it in February.
In addition to China's potential concerns about its energy consumption and environmental impact, Musk said that cryptocurrency is "fundamentally aimed at reducing the power of a centralized government" and that the Chinese "don't like that."
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Looking ahead, Musk expressed hope that the cryptocurrencies could help reduce "error and latency" in the financial system, but emphasized that he wouldn't call himself a "massive cryptocurrency expert."
"I think there’s some value to cryptocurrency," Musk said. "I don’t think its the second coming of the messiah, which they all seem to think."
As of the time of publication on Wednesday, the cryptocurrency market is trading higher, with Bitcoin currently around $42,000 per coin and rivals Ethereum and Dogecoin around $2,900 and 20 cents per coin, respectively, according to real-time price tracking by Coindesk.