U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler told Congress on Tuesday. That the SEC has no plans on banning crypto.
When asked by Rep. Ted Budd (R-N.C.), a longtime crypto supporter and member of the Congressional Blockchain Caucus, if the SEC had any plans on following China’s lead in banning cryptocurrency in support of a prospective central bank digital currency (CBDC), Gensler said, “No, that would be up to Congress.”
Fast facts on Chair Gensler
- Chair Gensler responded to Rep. Ted Budd’s question about whether the U.S. plans to ban crypto along the lines of China by saying: “I think our approach is really quite different. It’s a matter of how do we get this field [of cryptocurrencies] within the investor and consumer protection that we have.”
- Gensler’s comments echo those made by Federal Reserve chair Jerome Powell last week. The central bank head told the House Financial Services Committee the Fed has no plans to ban crypto as an asset class.
- Gensler repeated his previous comments about most cryptocurrencies being securities, how exchanges should check in and register with the SEC and how stablecoins, which he previously compared to “poker chips” at a casino, pose a systemic risk to the economy.
Gensler’s claims that the SEC does has no plan on banning crypto, mirrors the same answer made by Federal Reserve Chair Jerome Powell last week when the central bank head told the House Financial Services Committee that the Fed had “no plans to ban” the $2.2 trillion asset class.
Questions from Congress about the SEC’s efforts to control crypto come amid a growing debate on Capitol Hill. About how the industry and its various parts, including exchanges and stablecoins, should be regulated.
During Tuesday’s four-hour hearing, Gensler sends out questions about cryptocurrency, stablecoins, the regulation of exchanges, and decentralized finance (DeFi}
Gensler mostly repeated his previous thoughts on crypto policies. Including the need for exchanges to “come in and register” with the SEC, the potential systemic risk posed by stablecoins. And the need for them to be subject to an increased ruling. And that “most” cryptocurrencies fall under the definition of a security.
However, Chair Gensler also inflated his understanding of the SEC’s authority to manage the crypto industry.
When asked by Rep. Jim Himes (D-Conn.) to give “guidance” on the topic of crypto regulation. Gensler reiterated his previous position that crypto exchanges need to register with the SEC. But added that decentralized exchanges (DEXs) would also be subject to regulations.
“Even in decentralized platforms – so-called DeFi platforms – there is a consolidated protocol. And though they don’t take custody in the same way [as centralized exchanges], I think those are the places that we can get the maximum amount of public policy.”
Gensler also stretches on his stance on stablecoins, which he has previously named the “poker chips”. At the crypto “casino.” Gensler doubled down on his poker chip analogy during his answer. To several questions, adding that he sees stablecoins as a systemic risk to the economy.
“The $125 billion of stablecoins we have right now are like poker chips at a casino,” Genser said. “I do think that if this continues to increase – and it’s grown about tenfold in the last year. It can present those systemic wide risks.”
The statement comes a day after CoinDesk first reported that USDC stablecoin issuer Circle was served with an “investigative subpoena” from the SEC’s Enforcement Division in July.
The price of bitcoin, already up on the day, appeared to jump further on Gensler’s comments, rising to as high as $51,678.20. In recent trading, the price of the leading cryptocurrency was at $51,329.82, up 4.59% in the last 24 hours.