In Brief:
- The SEC to step in and improve investor and consumer protection, tax compliance, anti-money laundering, and financial stability.
- SEC will coordinate closely with the CFTC to regulate cryptocurrencies.
- He compared stablecoins to casino poker chips of the Wild West.
US SEC chairman Gary Gensler provided information about the crypto market in an interview with the Washington Post titled “The Path Forward Cryptocurrency with Gary Gensler”. He called Stablecoins gambling instrument and described cryptocurrency as a highly speculative asset class.
Washington Post columnist David Ignatius Speaks with SEC chair Gary Gensler about the crypto landscape, where Gensler provided his approach to regulating the digital asset industry.
In his conversation with the post, Gensler expanded on his position, saying “that crypto trading and lending platform offers up to hundreds or thousands of tokens, and it’s highly likely that they have on these platform securities, investment contracts, or notes, or others that fit the definition of security.”
SEC will likely have to coordinate closely with the Commodities Futures Trading Commission (CFTC). Gensler also talked about Stablecoins, the agencies might have to further collaborate with banking regulators, since “Stablecoins may have attributes of investment contracts, have some attributes like banking products.”
He also compared stablecoins to casino poker chips of the Wild West. He said, “We’ve got a lot of casinos here in the Wild West and the poker chip is these stable coins, you know, at the casino gaming tables.”
Gensler hinted that Congress might need to act to help this inter-agency collaboration along in order to get crypto under control ahead of any “spills”. “The banking authorities right now don’t have the full gamut of what they need and how we work with Congress to sort through that,” he said.
Gensler added that the United States has experimented with private forms of money in the past, citing the wildcat banking era of the 1860s. At the time, banks would compete with each other by issuing different banknotes.
“So I don’t think there’s long-term viability for five or six thousand private forms of money. So, in the meantime, I think it’s worthwhile to have an investor protection regime placed around this.”
The SEC chairman would like the SEC to step in and improve investor and consumer protection, tax compliance, anti-money laundering, and financial stability.
Gensler has previously taken aim at crypto’s emerging decentralized finance (DeFi) industry.
