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Elon Musk says that the United States should do “nothing” to regulate the cryptocurrency sector– unlike China. He also suggests that crypto’s advancement can merely be slowed but not “stopped” by governments.
Elon Musk On China and Crypto Regulation
The “Technoking” aired his thoughts in a recent interview at CodeCon 2021, an annual technology convention. The interviewer started by questioning Musk about China’s recent re-ban on cryptocurrency in the country.
He speculates that part of China’s concern with Bitcoin could be the network’s energy intensity. Southern China has been suffering numerous power outages caused by heightened electricity demand. Bitcoin mining could be partly responsible.
However, China’s announcement last week included a ban on all cryptocurrency transactions– not just mining. So in that respect, Musk has another theory for why the country may oppose it:
Cryptocurrency is fundamentally aimed at reducing the power of a centralized government… and they don’t like that. That’s my guess.
Musk said it didn’t matter because they couldn’t enforce it fully when asked whether this was the right thing to do. Though governments can slow the advancement of crypto, they cannot ultimately destroy it.
The interviewer then pivoted to the US, asking about what they should do to regulate the space. Musk advocates for a laissez-faire approach:
I would say do nothing. Just let it fly. What do you think governments can do?
The interviewer disagreed that governments can’t stop crypto, though neither she nor Elon Musk elaborated their points.
Ultimately, the Tesla CEO admits he isn’t some “massive cryptocurrency expert”. However, although he isn’t a Bitcoin Maximalist, he does hope to see cryptocurrency reduce “error and latency” in existing money systems.
What Can Stop Cryptocurrencies?
Bitcoin’s design aimed to be a compromise-resistant network. As such, whether it can stop it–even if governments oppose it– is a great question.
Christine Lagarde– president of the European Central Bank– also wishes to regulate Bitcoin. However, even she admits that such a task would, at least, require global cooperation.
There has to be regulation. This has to be applied and agreed upon … at a global level because if there is an escape, that escape will be used.
So far, China has been largely unsuccessful at eliminating the network, even within its borders. However, it has been successful at eliminating most mining operations. It is now ramping up its crackdown on transactions, forcing multiple crypto exchanges to flee the country.