Buffett associate backs crackdown on China’s crypto industry

The vice chairman of Berkshire Hathaway’s board, Charles Munger, said that Chinese authorities had made the right decision by banning cryptocurrencies and related activities. At a conference in Sydney, he called the move “mature,” according to Australian Financial Review.

“The current era is crazier than the dot-com era, though that boom was crazier in terms of valuations. … They [the Chinese authorities] are right to have decided and to clamp down hard on the boom, not letting it get too far. In this regard, my country lags behind China. They are acting more maturely,” he said.

On September 24, news broke of another crackdown by China on the crypto industry. The National Development and Reform Commission of the PRC cited the mining sector’s negative impact on the environment and its “insignificant” contribution to the economy.

The People’s Bank of China (PBoC) described as illegal the platforms that facilitate the exchange of digital assets among themselves or into fiat. Previously, the director of the PBoC’s payments and settlements department, Wen Xinxian, described cryptocurrencies and stablecoins as a threat to the traditional financial system.

In November, due to government actions, more than two dozen cryptocurrency companies announced their withdrawal from the Chinese market.

Munger noted that he wants to “make money by selling people products that are genuinely useful, and not harmful.” According to the 97-year-old billionaire, representatives of the crypto industry “think not about the consumer, but about themselves”.

“I would never buy cryptocurrency. I wish they had never been invented.”

The founder of Synthetix, Kane Warwick, deemed Munger’s stance hypocritical. He noted that a desire to earn money selling useful products does not prevent Berkshire Hathaway from being the largest shareholder in Coca-Cola.

Charlie munger: I want to make my money by selling people things that are good for them, not things that are bad for them.
Also Charlie Munger: load up on some more of that high fructose corn syrup kiddies! Isn’t it just dandy! https://t.co/xnefgTmLho

— kain.eth ⚔️👾 (@kaiynne) December 3, 2021

“Charlie Munger: ‘I want to earn money by selling people things that are genuinely useful, not harmful.’ Also Charlie Munger: ‘Push on the high-fructose corn syrup, kids! Isn’t it wonderful?’”

Analyst Josh Reager called Munger “the creator of the horse and carriage who wants cars never to appear.” The American hedge-fund manager and co-founder of AQR Capital Management, Cliff Asness, meanwhile, noted that the billionaire lacks sufficient experience for such conclusions.

Oh what does he know? When I hear from someone smarter and with more experience and success than Charlie Munger I’ll start to believe this “things are crazy talk.” https://t.co/yj5rlwe0gA

— Clifford Asness (@CliffordAsness) December 3, 2021

“When Charlie Munger was born, the world’s reserve currency was the Rai Stones,” wrote The Block founder Mike Dudas.

Meanwhile Munger said he does not trust fiat currencies, noting that over the past century nearly all have depreciated significantly. He argued that a decline in a currency’s purchasing power is natural, and all that governments can hope for is slow inflation.

Munger is no stranger to criticising the industry. In May he said he hated Bitcoin and described digital gold as «a financial asset created out of thin air». Earlier, he called the first cryptocurrency “a poisonous toxin.”

Earlier, in February Munger stated that Berkshire Hathaway had no plans to buy Bitcoin due to its high volatility.

Subscribe to ForkLog’s news on VK: VK.