Stablecoins Are The Poker Chips Of The Crypto Wild West, SEC’s Gary Gensler Says
In a recent conversation that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler had with the Washington Post, he expanded on his position on cryptocurrencies.
Gensler stuck to his guns stating that his agency has “robust” authority to regulate the crypto industry and that “most” digital currencies show resemblance of securities.
The subject of stablecoins was of course on the table. They have become under scrutiny lately and a growing area of concern for regulators.
In the interview with the Washington Post, Gensler expanded on an analogy he had previously made when comparing the crypto industry with the Wild West. On Tuesday he said:
“We’ve got a lot of casinos here in the Wild West. And the poker chip is these stablecoins.”
Gensler also noted that the SEC is currently putting together a report about stablecoins under the supervision of Treasury Secretary Janet Yellen. Furthermore, he said the SEC is working with banking regulators and Congress to push for regulation of stablecoins.
A week ago the SEC Chairman testified before the Senate Banking Committee, where he argued that crypto exchanges such as Coinbase have to register with the SEC. The sprawling of thousands of cryptocurrency tokens is an issue for the SEC as he said it is “highly likely” that not just only a few of them can be defined as a security. He also said:
“History tells us that private forms of money don’t last long. I don’t think there’s a long-term viability for 5,000 or 6,000 private forms of money.”
Speaking of crypto and trading platforms he then said:
“Those platforms should come in, and they should figure out how to register. Not many have, and so I do really fear that we’ll keep bringing these enforcement cases but there’s gonna be a problem … and, frankly, when that happens I think a lot of people are going to get hurt.”
Despite cryptocurrency being a catalyst for innovation in the global payments system and Gensler even crediting bitcoin’s pseudonymous creator, Satoshi Nakamoto, referring to him as “Nakamoto-san”, he called for proactive regulation:
“I don’t think it’s a good idea to wait until there’s a spill in aisle three. If we don’t do anything and there’s never a spill in aisle three, great… I think there’s just a lot of warning signs and flashing lights that we might have a spill on aisle three and I’d rather get ahead of it.”
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Author: Peter Siu