Elon Musk Tells US Government To Back Off Crypto Regulation

Tesla CEO and cryptocurrency champion Elon Musk has said the US government should steer clear of trying to regulate the crypto market.

Elon Musk has long been a supporter of digital currencies. In February Tesla disclosed that it had purchased $1.5bn (£1.1bn) in bitcoin, and it said at the time it would soon accept payment in the cryptocurrency for new electric cars.

In March Musk confirmed that Telsa vehicles in the US could be purchased by Bitcoin. But in May Musk said the electric car maker would no longer accept Bitcoin payments from customers, due to environmental concerns about its generation. This triggered a collapse in the value of the world’s largest digital currency.

Regulatory concerns

The extreme volatility of cryptocurrencies has long worried governments and regulators, but this didn’t stop the country of El Savaldor from recently adopting Bitcoin as a legal tender.

As far back as 2014 for example, the Bank of England warned that Bitcoin could pose a threat to financial stability should it see widespread adoption.

China, where many crypto miners used to be based, officially banned cryptocurrencies in 2019, but began taking stronger measures against crypto transactions and mining activities in May this year.

And this week China’s central bank declared that it considers all cryptocurrency transactions “illegal”.

And the US has also stepped up its efforts against cryptocurrencies.

Earlier this month the US Treasury department announced plans to impose sanctions, against ransomware crypto payments.

Last week the US Treasury slapped cryptocurrency exchange Suex with sanctions for its alleged role in laundering ransomware payments.

Back off

But Elon Musk has cautioned the US government from getting involved.

“It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement,” Musk was quoted by CNBC as saying at the Code Conference in Beverly Hills, California.

Musk was responding on stage to a question from New York Times columnist Kara Swisher. She asked whether the US government should be involved in regulating the crypto space.

“I would say, ‘Do nothing,’” he was quoted as saying.

Musk also reportedly commented on China’s latest crypto crackdown.

Musk said the heavy hand likely has to do with the country’s “significant electricity generation issues.”

“Part of it may actually be due to electricity shortages in many parts of China,” said Musk. “A lot of South China right now is having random power outages, because the power demand is higher than expected.”

“Crypto mining might be playing a role in that,” he said.

At a higher level, the decentralised nature of cryptocurrencies may present a challenge for the Chinese government.

“I suppose cryptocurrency is fundamentally aimed at reducing the power of a centralised government,” Musk reportedly said. “They don’t like that.”