Scott Mlyn | CNBC
Famous investor Kevin O’Leary invests in digital currencies, but he hasn’t done it lightly, telling CNBC he would rather consult with regulators on this space than be a “crypto cowboy.”
O’Leary told CNBC’s “Capital Connection” on Tuesday that he prefers to consult with regulators before investing in cryptocurrency, to see “what’s possible and what’s not” in terms of position on space.
“I have no interest in investing in litigation against the SEC [U.S. Securities and Exchange Commission], that’s a very bad idea, ”he said during a discussion of the US regulator’s case with financial technology firm Ripple.
The SEC’s case against Ripple centers on its concerns about the fintech company’s ties to XRP, the world’s seventh largest cryptocurrency. The SEC alleged that Ripple and its executives sold $ 1.3 billion worth of tokens in an unregistered securities offering.
O’Leary, who is a “Shark Tank” investor and chairman of O’Leary ETF, said he preferred to adapt and comply with regulators “because that’s where the real capital is” .
“I have no interest in being a crypto cowboy and making someone unhappy with me because… I have so many real world assets that I have already invested in that I have to be compliant.” , he added.
In terms of investing in digital money pegged to national currencies, also known as “stablecoins,” O’Leary said he has no interest in holding the digital Russian ruble or the yuan. Chinese because he didn’t know enough about the country’s blockchain or how they monitored the ownership of money.
Instead, O’Leary believed that the biggest opportunity for stablecoins remained with a currency tied to the US dollar.
He acknowledged how “counterintuitive” this can seem given the rise in inflation, as it decreases the purchasing power of the dollar.
However, O’Leary explained that he was sitting on a “large sum of money”, having sold much of his commercial real estate investments over the past two years, which would lose his purchasing power due inflation.
By comparison, O’Leary said he could generate a potential return of 6% by buying USD Coin, which is the world’s second-largest stablecoin managed by digital currency company Circle and is pegged to the US dollar. . Although O’Leary clarified that he can currently only invest up to 5% of his money in USDC.
But he added that there was an opportunity for the United States to “lead the charge” with stable coins.
Crypto as “software development”
O’Leary said he was in Abu Dhabi, the capital of the United Arab Emirates, to attend the city’s annual fintech festival, also to meet with the government and regulators to better understand the position of the country on its blockchain rules in finance.
He said he does not view cryptocurrencies, like bitcoin, “in the same way that others do.”
O’Leary said he viewed this as “software development” and so when looking to invest in the space, he wanted to understand which blockchain platform “would win in the long run.”
He cited Solana, Polygon and HBAR as a few examples.
“I have to invest in all of those, not just one of them because I don’t know who will be the winner,” he explained, adding that he was looking for markets with the best talent and engineering policies in the process. .
O’Leary said the United States currently does not have an exchange-traded fund that holds bitcoin because the regulator is “taking its time” on blockchain regulation.
“This is why I came here, I want to hear from the regulator what the plan is so that I can be involved in this because I go to all the jurisdictions that are thinking about decentralized finance,” he said.
– CNBC’s Ryan Browne contributed to this report.