SEC Chairman Gary Gensler: Cryptocurrency Is a 'Highly Speculative Asset Class'
On Tuesday, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler spoke to Washington Post columnist David Ignatius about the cryptocurrency space, blockchain technology, and his approach to regulating the space.
At the start of the interview, Gensler commented on the recent market crash, calling cryptocurrencies a “highly speculative asset class.”
“Stablecoins are almost like poker chips in a casino right now,” Gensler said. “We have a lot of casinos in the Wild West, and the poker chips are these stablecoins on the casino tables.”
When discussing which tokens fall under the SEC’s jurisdiction, Gensler argued that “most of these tokens are securities.” At the same time, only some are commodities, while some have attributes of both.
In this case, the SEC may need to coordinate closely with its sister agency, the Commodity Futures Trading Commission (CFTC). Since some tokens look more like commodities and others mix attributes of securities with commodities, the institutions may need to cooperate, Gensler said.
In the field of stablecoins, these institutions may need to further cooperate with banking regulators, because "stablecoins may have the attributes of investment contracts and some attributes of banking products."
Both the SEC and CFTC would benefit from “help from Congress” to regulate and enforce stablecoins, Gensler said. However, the laws currently in place appear to be broad when it comes to dealing with modern financial instruments like cryptocurrencies.
Before serving at the SEC, Gensler taught a blockchain class at MIT. He believes digital assets have potential, but that doesn't make them immune to regulation.
He said: "I taught related courses at MIT and studied it for a few years. If I didn't think it [encryption] was interesting and innovative, I wouldn't really spend my time on it, but at the same time, I don't think it's interesting. Do not think that [encryption] technology will last long outside the framework of society and public policy. In this case, we must ensure investor and consumer protection". Gary Gensler stated that he hopes to bring cryptocurrencies into the public policy framework, thereby ensuring that cryptocurrencies are within the scope of regulation and meet policy objectives, so that the fast-growing industry does not "destabilize the system."
He said: "I think Satoshi Nakamoto (Satoshi Nakamoto) had innovations in the white paper that he released about 12 years ago. But what we have now is a very speculative asset class, stored on digital ledgers, and the value It could go down sharply, it could go up sharply."
Stablecoin reserves have been called into question recently, and most “cash reserves” are not actually held in cash. Earlier this year, Tether disclosed a breakdown of its USDT reserves, of which only 2.6% were held in cash. The remainder is a mix of secured loans, corporate bonds, crypto assets and other investment vehicles.
However, Gensler remained skeptical about the security and legitimacy of these assets, although he acknowledged that the cryptocurrency industry has been able to influence wider finance.
He said: "I do think this new technology is very interesting, and whoever Satoshi Nakamoto is, it brings real change. It is driving global central banks to rethink how to provide payment systems, driving changes in finance and fintech. "
The SEC chairman's comments follow major U.S.-based cryptocurrency exchange Coinbase announcing that it is ditching its crypto lending program. The SEC previously threatened legal action against the exchange, saying it believed the scheme was a security.
Gensler had said in August that it wanted to introduce crypto-related policy changes around token offerings, decentralized finance, stablecoins, custody, exchange-traded funds (ETFs) and lending platforms. He has long urged crypto projects to register with the SEC, saying specifically that they should work with regulators to survive in the long run.
Gensler also added that the SEC is working on a report on stablecoins under the direction of Treasury Secretary Janet Yellen. Yellen is known for her opposition to cryptocurrencies on the grounds that they facilitate criminal activity.
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Author: Amy Liu
This article is from Bitpush.News, reproduced with authorization.
