- The head of the US regulatory body of Wall Street, Gary Gensler, compared cryptocurrencies to poker chips and the industry to the “Wild West.”
- He said he has enough authority to act on the crypto industry and that he will.
- The SEC is seeking to act in coordination with other regulatory bodies in the financial sector to tackle the issue of stablecoins.
The Chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, again called for cryptocurrencies and other digital assets to be regulated. The official is concerned that this market, which he compares to the “Wild West”, will continue to grow without law.
“These stablecoins are almost acting like poker chips in the casino right now,” Gensler told The Washington Post. He said that if there is not stricter oversight of the crypto industry, “people get hurt.”
Gensler, who does not hide his rejection of cryptocurrencies, has started a campaign this year for more restrictions to be imposed on users. He does not believe that decentralized digital money is a durable alternative to fiat money.
The SEC Has Sufficient Authority
“History tells us that private forms of money don’t last long,” he shot. He recalled that between the years 1830 and 1860 the United States lived what he called the “era of wild banking” with private money. “All this had a great cost, many problems,” he said.
During the interview broadcast through “Washington Post Live”, the head of the regulator said that the SEC has strong authority and will use it, in accordance with existing laws, to regulate the crypto industry in general.
He said that when it comes to stablecoins, the agency must act in coordination with other regulatory bodies in the financial sector. In this way they will be able to guarantee that no matter on this sector is deregulated.
On The Flipside
- In early August the official asked Congress for more power to regulate cryptocurrencies and their market.
“Certain rules related to crypto assets are well settled. The test to determine whether a crypto asset is a security is clear,” Gensler commented while speaking at the Aspen Security Forum held in Colorado. And he added: “we have taken and will continue to take our authorities as far as they go”.
At that time Gensler said there were “some loopholes in this space: we need more authority from Congress to prevent transactions, products and platforms from falling through regulatory fissures.”
The SEC chief also asked legislators for “more resources to protect investors in this growing and volatile sector.” He considers that the way the cryptocurrency market is currently operating is the “Wild West”, that is, a territory without law.
Why You Should Care?
- For Gensler, crypto assets move in a speculative investment space.
- It affirms that cryptocurrencies are not used as much as a unit of account and do not fulfill all the functions of money.
Before taking the reins of the SEC, Gensler taught classes on cryptocurrencies and blockchain at the Massachusetts Institute of Technology (MIT).
He considers that with its current structure, the organization he leads is not able to offer sufficient protection to investors. “This asset class is plagued with fraud, scams, and abuse in certain applications,” Gensler said.