Charlie Munger Engages in Crypto Debate with Stripe Founder, Deems it a ‘Store of Delusion’

In the last-year episode of the Colossus podcast, which aired today, the vice chairman of Berkshire Hathaway, Charlie Munger, engaged in a conversation with John Collison, the co-founder of Stripe.

Delving into various topics, the discussion took a notable turn towards Munger’s views on cryptocurrency and gold.

Munger says crypto ought to have been driven out as illegal

The conversation began with Collison referencing Munger’s historical disdain for gold and his critique of cryptocurrency. Munger asserted, “I like gold a lot better than I like cryptocurrency.” He candidly expressed his dislike for cryptocurrency. He even suggested that it “ought to have been driven out as illegal.”

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Interestingly, Munger was more critical of cryptocurrency than he was of gold. He clarified, “I don’t hate gold as an investment as much as I hate cryptocurrency.” Munger went on to emphasize his belief that cryptocurrency should be considered illegal.

Munger prefers gold over cryptocurrency

Collison raised the question of a U.S.-centric perspective. He stated that in countries with weaker property rights and volatile currencies, the appeal of cryptocurrency might be more apparent. Munger, however, stated that even in such scenarios, he would prefer gold over cryptocurrency.

Munger’s skepticism toward cryptocurrency deepened as he dismissed it as a “store of delusion.” He labeled those who promoted cryptocurrency as either “scumballs or delusionaries.”

Collison highlighted the potential efficiency of cryptocurrency in the digital era. He argued that the ease of handling cryptocurrency without the need for physical inventories or intrinsic value could be advantageous. However, Munger advocated for the illegality of cryptocurrency, drawing parallels with anti-counterfeiting laws.

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Munger calls crypto a store of delusion

In Munger’s eyes, the evolution of gold as a currency was a positive force for civilization. He also firmly believed that the world didn’t need to introduce cryptocurrency as an alternative. Despite Collison’s attempt, Munger concluded, “You can call it a store of wealth; I call it a store of delusion.”

While Collison expressed a willingness to agree to disagree, Munger reiterated his dislike for cryptocurrency but assured, “I can handle it if you like crypto. I don’t like it, but I can handle it.”

However, the conversation diverted from cryptocurrencies to other arrays of topics. These include the challenges of investing, American society, opinions on the SEC, and others.

Speaking of the SEC, which is considered a main hindrance to clearer crypto regulation in the US, Monger mentioned that we’re a lot better with an SEC.

“So I’m glad we have an SEC. It would have been crazy not to have one.”

Munger said

Talking about the podcast, Collison also shared the news about the launch in one of his recent tweets.”He highlighted the opportunity he had to sit down with Charlie Munger before his passing and pose numerous questions. Collison expressed admiration for Munger’s frequent references to business history throughout the discussion.

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Munger has consistently voiced criticisms

Munger has consistently voiced strong criticisms of cryptocurrency, referring to it as “crazy, stupid gambling,” “worthless,” and “crypto crap” in various public statements. He held the belief that there are no rational arguments in favor of cryptocurrency and has openly expressed his dissatisfaction with the U.S. for permitting its existence.

Additionally, Munger has advocated for the banning of cryptocurrencies, drawing attention to China’s example, where cryptocurrency was banned in 2021.

Munger, a distinguished figure in business and a longtime friend and partner of Warren Buffett passed away at the age of 99. He breathed his last at a hospital in Santa Barbara, California, on November 28, 2023, just 34 days before reaching his centenary.