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Tesla CEO Elon Musk said on Tuesday that the US government should avoid trying to regulate the crypto market.
“It’s not possible, I think, to destroy crypto, but it’s possible for governments to slow its progress,” Musk said at the Code conference in Beverly Hills, California.
Musk was responding onstage to a question from New York Times columnist Kara Swisher. She asked if the U.S. government should be involved in regulating the crypto space.
“I would say, ‘Don’t do anything,'” he said.
Tesla said earlier this year that it bought $ 1.5 billion worth of bitcoin. The value of those holdings swelled to around $ 2.5 billion in the second quarter as bitcoin prices soared. Bitcoin has since fallen, along with other cryptocurrencies.
Musk, who has often touted his support for various digital coins on Twitter, is optimistic about the role of crypto in potentially reducing “error and latency” in existing currency systems. But he admitted that crypto doesn’t have all the answers to society’s ills.
“I wouldn’t say I’m a big cryptocurrency expert,” Musk said. “I think there is some value in cryptocurrency, but I wouldn’t call it the second coming of the Messiah.”
Musk on China’s crypto crackdown
Musk also touched on China’s role in mining and regulating crypto.
Last week, China’s central bank laid out tougher measures in its broader crackdown on crypto, including systems optimized to monitor crypto-related transactions.
Musk said the heavy hand was likely related to “the country’s significant power generation problems.”
“This could in part be due to power shortages in many parts of China,” Musk said. “Much of southern China is currently experiencing random power outages as demand for electricity is higher than expected. “
“Cryptocurrency mining could play a role in this,” he said.
On a higher level, the decentralized nature of cryptocurrencies can present a challenge for the Chinese government.
“I guess cryptocurrency is fundamentally about reducing the power of a centralized government,” Musk said. “They don’t like it.”
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