Scott Mlyn | CNBC
Prominent investor Kevin O'Leary invests in digital currencies, but he didn't make it easy, telling CNBC that he would prefer to consult with regulators on this instead of being a "crypto cowboy" .
O & # 39; Leary told CNBC's "Capital Connection" on Tuesday that he prefers to consult with regulators before investing in cryptocurrencies to see "what is possible and what is not" regarding their stance to this room.
"I'm not interested in investing in litigation against the US Securities and Exchange Commission, which is a very bad idea," he said in a discussion on the US regulator's case with fintech firm Ripple.
The SEC's case against Ripple centers on concerns over the fintech company's links with XRP, the world's seventh largest cryptocurrency. The SEC alleged that Ripple and its executives sold the $ 1.3 billion tokens in an unregistered securities offering.
O & # 39; Leary, who is an investor in Shark Tank and chairman of O & # 39; Shares ETF, said he prefers to go along with regulators and comply with them "because that's where the real capital is."
"I'm not interested in being a crypto cowboy and making someone unhappy with me because … I have so many assets in the real world that I've already invested in that I have to be compliant," he added .
Regarding investing in digital cash pegged to national currencies, also known as "stablecoins," O & # 39; Leary said he was not interested in holding the digital Russian ruble or the Chinese yuan because it was not enough knew about the country's blockchain or how it worked, monitored the possession of the money.
Instead, O'Leary believed that the greatest opportunity for stablecoins remains in a dollar-pegged currency.
He acknowledged that this may sound "counter-intuitive" given the rise in inflation, as it reduces the dollar's purchasing power.
However, O & # 39; Leary stated that he was sitting on "a large amount of cash" after selling off much of his commercial real estate investments in recent years that were losing purchasing power due to inflation.
By comparison, O'Leary said he could get a potential 6% return by buying into the USD coin, which is the world's second largest stablecoin, operated by digital currency company Circle and sold to the US Dollar is pegged. Although O'Leary made it clear that he can only invest up to 5% of his cash in USDC at this time.
However, he added that the US has the ability to "take the lead" with stablecoins.
Crypto as "software development"
O'Leary said he attended the city's annual fintech festival in the United Arab Emirates' capital, Abu Dhabi, to also speak to the government and regulators to learn more about where the country is from its rules for blockchain in finance.
He said that he doesn't see cryptocurrencies like Bitcoin "like other people".
O & # 39; Leary said he saw it as "software development" and when he wanted to invest in that area, he wanted to understand which blockchain platform would "win over the long term".
He named Solana, Polygon and HBAR as examples.
"I have to invest in all of these, not just one, because I don't know who the winner will be," he explained, adding that he was looking for the markets that have the best engineering talent and policies in the process .
O & # 39; Leary said the US does not currently have an exchange-traded fund holding Bitcoin because the regulator is "taking its time" on blockchain regulation.
"That's why I came here, I want to hear from the regulator what the plan is so that I can get involved because I go to every jurisdiction that thinks about decentralized funding," he said.
– CNBC's Ryan Browne contributed to this report.