The SEC Chairman spoke to the European Parliament to share his strategic advice on the regulation of cryptoassets and decentralized finance.
Speaking to the European Parliament’s Economic and Monetary Affairs Committee, SEC Chairman Gary Gensler highlighted the role of fintech in globalizing economic flows and changing how isolated national markets work:
“I think the transformation we are currently experiencing may be no less than the one that led to the emergence of the Internet in the 1990s.”
Gensler singled out the $ 2.1 trillion cryptocurrency markets as a “truly global” asset class and said that these markets have no boundaries and operate 24 hours a day, seven days a week.
Finnish politician Eero Heinäluoma asked Gensler about the ecological footprint associated with cryptoassets. The politician noted that bitcoin miners consume more electricity than the Netherlands or Sweden. Gensler described the environmental impact of Bitcoin as a major concern, but noted the growing popularity of more energy efficient Proof-of-Stake (PoS) blockchains. He concluded that carbon concerns will center around Bitcoin as the popularity of PoS blockchains grows.
The SEC chairman stressed the need to develop sound public policy frameworks to balance support for innovation in the cryptoasset industry and decentralized finance while maintaining robust investor protection.
Gensler said DeFi platforms “provide direct market access to millions of investors” without an intermediary between users and the protocol, but noted that this comes with great risks. He stated that the cryptocurrency and DeFi industry is “rife with fraud and abuse,” and stressed the vulnerability of investors in the absence of “clear commitments to protect them on these platforms.”
The SEC chairman also expressed concern about stablecoins. He said that nearly three-quarters of cryptocurrency trading volumes involve pairs that include stablecoins. He described stablecoins as a handy tool for those “trying to circumvent a myriad of public policy objectives,” including anti-money laundering measures and international sanctions.
“You’ve heard of Facebook’s Diem, but there is already a $ 116 billion stablecoin market,” he said.
Earlier this week, Gary Gensler said that cryptocurrency platforms need regulation. Otherwise, they risk losing people’s trust.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
