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Elon Musk wants US regulators to just let cryptocurrencies fly - saying the assets aren't the 'second coming of the Messiah'

·3 min read
Tesla CEO Elon Musk points a finger upward while wearing a black bandana around his neck
Tesla CEO, Elon Musk. Patrick Pleul/Pool via Reuters
  • The US government should "do nothing" about regulating cryptocurrencies, Elon Musk said Tuesday.

  • "I don't think it's like the second coming of the Messiah, which some people seem to think," he said.

  • China banned crypto because the country doesn't like their aim of reducing the power of centralization, he said.

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Elon Musk said he thinks US authorities should stand away from regulating cryptocurrencies, as their intervention could hold back growth.

"It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement," he said in an interview at the Code Conference in Los Angeles on Tuesday.

New York Times columnist Kara Swisher asked Musk what the US government should do about regulating the industry.

"I would say, do nothing," he said, adding, "Just let it fly."

Gary Gensler, chair of the Securities and Exchange Commission, has pushed for greater oversight of the "Wild West" market for digital assets, saying unless crypto exchanges are regulated, they risk losing public trust.

And unlike Musk, some crypto industry leaders believe tighter scrutiny will be a benefit by giving investors more clarity and protection. Coinbase is preparing to pitch a regulatory framework to authorities, while billionaire investor Mark Cuban has acknowledged that crypto regulation built around existing fraud laws isn't a bad thing.

Musk, who co-founded payment service provider PayPal in 1999, told Swisher he hopes cryptocurrencies will reduce "error and latency" in the established financial system. But he was measured in his hopes for the difference they could make.

"I wouldn't say that I'm some massive cryptocurrency expert," he said. "There's some value in cryptocurrency. I don't think it's like the second coming of the Messiah, which some people seem to think."

The Tesla CEO also spoke about China declaring crypto-related transactions illegal and its crackdown on crypto mining. He suggested the latest ban was a result of the Communist Party's concern that digital assets threaten its grip.

"It would appear that they don't love cryptocurrency," he said. "I suppose cryptocurrency is fundamentally aimed at reducing the power of a centralized government, and they don't like that. That's my guess."

The energy crisis in China could have played a part in the government imposing tougher measures, Musk said.

"I think part of it may actually be due to electricity shortages in many parts of China," he said. "A lot of South China right now is having random power outages, because the power demand is higher than expected."

The billionaire Tesla CEO disclosed in February that the electric-vehicle maker had made a $1.5 billion bet on bitcoin, and would accept the cryptocurrency in payment for cars. But only three months later, Tesla walked back on its decision and stopped accepting bitcoin payments given that its energy-intensive impact on the environment was concerning.

The "Musk effect" had roiled the crypto ecosystem earlier this year, when almost every related tweet from the Tesla boss would send token prices either soaring or tumbling. Swisher asked him whether he thinks the influence of his tweets on crypto prices is a good thing.

"If it goes up, I suppose it is," Musk said.

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Read the original article on Business Insider