Elon Musk: ‘Crypto is impossible to destroy’

Ten of China’s top financial watchdogs and state agencies stated in a joint notice on September 24 that all crypto-related operations are “illicit financial activities” and could result in criminal charges. However, Elon Musk doesn’t like China’s chances of victory. “I think it is not possible to destroy crypto,” said Elon Musk at the Code Conference in California.

Trading crypto-currency has been officially banned in China since 2019, but trading has continued online through foreign exchanges. The purpose of China’s latest move is to snuff out any trading and mining of crypto within the country.

China is one of the world’s largest cryptocurrency markets. However, exchanging cryptocurrency with fiat money, trade crypto and derivatives, issue tokens and providing market-making or technical assistance for crypto transactions could now lead to criminal charges. In addition, giving crypto services to Chinese citizens via overseas exchanges is also illegal.

Last Friday’s announcement is the latest move in China’s crackdown on crypto. “Virtual currency-related business activities are illegal financial activities,” said the People’s Bank of China, which warned that crypto “seriously endangers the safety of people’s assets” (source).

Global regulators continue to scrutinize the cryptocurrency industry. However, Tesla CEO Elon Musk thinks efforts to remove the currency from the global market have no future because it is indestructible.

The decentralized nature of cryptocurrencies will make it hard for the Chinese government to stop crypto.

“It is not possible to, I think, destroy crypto, but it is possible for governments to slow down its advancement,” Musk said at the Code Conference in California.

Elon Musk suggested China’s crackdown on cryptocurrency was motivated by the Communist Party’s efforts to maintain its grip on power and the country’s electricity generation issues.

“I suppose cryptocurrency is fundamentally aimed at reducing the power of a centralized government, and they don’t like that,” said Musk. […] Part of it may actually be due to electricity shortages in many parts of China. 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 noted.