Why Kevin O'Leary Believes You Have to Be 'Bullish' to Want Crypto Regulation

Kevin O'Leary, aka Shark Tank's "Mr. Wonderful" has been a crypto champion for quite some time. So much so that he even gave his nickname to a crypto app called WonderFi. O'Leary even thinks crypto could become the 12th sector of the economy. But there's a big if: He believes the industry needs regulation if it's to achieve its potential.

This view sets the successful entrepreneur at odds with many in the crypto world who argue that regulation would cripple crypto. Bitcoin (BTC) was designed to be the world's first decentralized digital currency. It functions without any middlemen, and the idea is that it offers a system of money that doesn't need the involvement of central banks and governments. As a result, some crypto enthusiasts think regulation goes against the whole ethos of Bitcoin.

Why Kevin O'Leary is optimistic about regulation:

Increased regulation in Canada was actually what made O'Leary change his mind about crypto. Compliance and sustainability matter to him, so when Canada approved its first crypto exchange license, it was a game changer. He could invest in crypto without being a cowboy. O'Leary thinks he is not alone, and that many investors who want to play by the rules will get involved when stronger regulation gets passed.

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The Chairman of O'Shares Investments believes the low transaction costs, speed, and transparency make crypto so much better than what's available right now. But the lack of regulation is a huge obstacle, particularly when it comes to attracting institutional investors. According to O'Leary, institutional money is sitting on the sidelines at the moment because compliance departments won't sign off on significant crypto investments.

O'Leary told the Bankless podcast that regulation could bring a trillion dollars into the industry overnight. He says the majority of investor capital funds hold no crypto right now because there's no clear policy. But he argues they would get involved if authorities introduced clear rules. And it wouldn't only help crypto prices, O'Leary thinks it would also mean less volatility, and more liquidity. All of this is why Mr. Wonderful recently tweeted, "You have to be bullish if you believe in crypto regulation."

He particularly wants to see regulation in stablecoins, as this would be a big win for the industry. It might entail regular audits to ensure stablecoins have the reserves they say they have, and could even pave the way for stablecoins to gain FDIC insurance. Once stablecoins are regulated, he thinks governments can then turn their attention to other areas of the industry.