What should governments do about cryptocurrencies? Nothing! This was stated by Elon Musk during an interview at the Code conference in Beverly Hills, California.
Elon Musk: China doesn’t like cryptocurrencies
Elon Musk’s conversation with Kara Swisher began on the subject of cryptocurrency. It was inevitable to talk about an authoritarian turnaround in China, where all crypto activities were banned. Musk commented that it is clear that China does not like cryptocurrencies. His argument is as follows:
“The cryptocurrency is basically aimed at reducing the power of the Chinese government, and they don’t like it.”
Another hypothesis that CEO Tesla considers to justify China’s attitude to cryptocurrencies is the energy resources they consume.
Despite increasingly stringent bans in China and the growing attention of regulators, not least in the United States, Tesla’s CEO says governments can do nothing about cryptocurrencies: it is impossible to destroy them. Elon Musk stated on this topic:
“It is impossible to destroy the crypto. However, governments have the power to slow down their development. “
So what should governments do about cryptocurrencies?
“I’d say they shouldn’t do anything.”
Elon Musk concluded his part of the interview on cryptocurrencies by saying that he did not think he is an expert, nor that cryptocurrencies, despite their potential, were the new messiah.
Brian Armstrong’s answer
Coinbase CEO Brian Armstrong responded to Elon Musk’s words about regulation. His view is different: Regulatory interventions need to be made that are sensitive and sensible to the sector. Not surprisingly, Coinbase has become an adviser to the US government and is developing a draft regulatory framework.
In recent weeks, CEO Coinbase has also clashed with the SEC, abandoning the launch of Coinbase Lend, a new exchange service that would allow users to earn interest by lending cryptocurrencies. Coinbase complains that the SEC has never provided an explanation for their opposition to launching Lend. All they could say was that if Coinbase launched the service, the SEC would take legal action.
Ripple, on the other hand, has been involved in the legal battle with the SEC since December. The US regulator claims that the management of Brad Garlinghouse and Ripple sold XRP as securities without the appropriate licenses. The problem here is the nature of the token, whether it is similar to BTC or Ether, or whether it is a security instead and should be treated as such. At the moment, there is no possibility of settlement between the parties.
Maybe if the legislative framework were clearer, both episodes would never have happened. But cryptocurrency is a young and evolving sector and probably still has a long way to go.