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In line with Jerome Powell’s comments last week, SEC chairman Gary Gensler confirms he has no plans to ban cryptocurrency. Instead, the SEC’s approach remains strictly on regulating the space and protecting consumers.
Regulation: Banning, Says Gensler
Gensler clarified his stance during a House hearing today in response to a question from Republican lawmaker Ted Budd. Representative Budd led the charge to amend dubious phrasing on cryptocurrency regulation in last month’s infrastructure bill. He also proposed an anti-crypto-terrorism bill in January, though he has generally supported the industry.
Today, Budd asked if the SEC favored a unilateral cryptocurrency ban, as was recently reiterated in China. Gensler says he’s familiar with China’s actions but doesn’t see them as a model to follow. Instead, he says the SEC has a different approach. They focus on ensuring investor and consumer protection, anti-money laundering, and tax compliance in the space.
Gensler also mentioned “financial stability” issues among stablecoins as another priority among regulators. Last month, Gensler referred to Stablecoins as “poker chips” at the casino gambling tables.
Overall, Gensler’s comments mirror those of Federal Reserve Chairman Jerome Powell just days ago. Powell also stated that he has no intention to ban cryptocurrency and instead sees stablecoins as a greater regulatory priority.
Gensler adds that any potential ‘ban’ would be up to congress. He concludes by restating that many tokens on the market meet the criteria of “securities” but doesn’t specify which.
Cryptocurrency Governance: China vs. the USA
China is famous for its hostility toward cryptocurrencies altogether. As mentioned by Budd, the country has been on a “warpath” against the sector since 2013. They have implemented bans on mining, ICOs, exchanges, and most recently, transactions altogether. This is likely a push to clear the way for their own CBDC, which they are well on their way to implementing.
Meanwhile, the US remains more welcoming to cryptocurrency than China. However, its stance on blockchain technology is also less precise. As a result, there is much ambiguity regarding what actions and crypto products are permissible to regulators. For example, Coinbase recently tried establishing a crypto lending service but was threatened with a lawsuit for no apparent reason.
Earlier today, another Republican representative unveiled new legislation to help provide more transparency in the space. His bill is a safe harbor for blockchain startups that need precise requirements to avoid an SEC crackdown.