The SEC chairman said at a hearing in the US Congress that his agency had no plans to ban cryptocurrencies following the example of China – if necessary, this decision would remain with Congress.
Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC), once again outlined the regulator’s position in relation to the cryptocurrency industry. This week he attended a US Congressional hearing in which Rep. And longtime cryptocurrency supporter Ted Budd asked Gensler about the SEC’s plans to ban cryptocurrencies.
Gensler said the SEC has no plans to follow China’s lead in banning cryptocurrencies in favor of a future state-owned cryptocurrency, and said the matter is up to Congress. Last week, US Federal Reserve Chairman Jerome Powell also announced that the US does not plan to impose an outright ban on cryptocurrencies.
During a four-hour hearing on Tuesday, Gensler answered questions about cryptocurrency, stablecoins, exchange regulation, and decentralized finance (DeFi). He reiterated his previous statements on cryptocurrency regulation, including the need for exchanges to register with the SEC, potential systemic risk, and the inevitability of stablecoin regulation.
Gensler elaborated on the potential powers of the SEC to regulate the cryptocurrency industry. Rep. Jim Himes has proposed that the SEC issue guidance on cryptocurrency regulation. In response, Gensler said that cryptocurrency exchanges must register with the SEC, but decentralized exchanges must also operate in accordance with the rules.
“Even in decentralized platforms – the so-called DeFi platforms – there is a centralized protocol. And although they do not implement storage to the same extent as centralized exchanges, I think they should be in the sight of regulators, ”said Gensler.
During the hearing, Gensler reiterated that he sees stablecoins as a systemic risk to the economy.
“$ 125 billion worth of stablecoins are like casino poker chips,” Gensler said. “I believe that if they continue to grow – and the capitalization of stablecoins has grown by about tenfold over the past year – they could pose system-wide risks.”
As a reminder, last month the SEC chairman called cryptocurrencies a highly speculative asset class and said that in many cases they have no intrinsic value.