New SEC Chairman Unveils Policies for Cryptocurrencies, Calls Bitcoin ‘Scarce Store of Value’
The new chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has shared his view on how the SEC plans to regulate cryptocurrencies, particularly bitcoin. He calls bitcoin “a digital, scarce store of value” and stresses the need to put in place some investor protections for this asset class.
New SEC Chairman Talks About Bitcoin, Crypto Regulation
SEC Chair Gary Gensler talked about cryptocurrency policies and bitcoin in an interview with CNBC Friday. Gensler taught classes at the Massachusetts Institute of Technology (MIT) in financial technology, cryptocurrency, and blockchain technology. He was confirmed as the new SEC chairman last month.
Replying to a question about how he would regulate cryptocurrencies, the chairman replied, “To the extent that something is a security, the SEC has a lot of authority.” Noting he will refer to cryptocurrencies as “crypto tokens,” the former MIT professor emphasized that “a lot of crypto tokens … are indeed securities.”
He then referenced work done by the prior chairman and the SEC under his leadership. “The prior SEC brought numerous enforcement actions to sort of bring some of these security or investment contract tokens to into the rules,” Gensler said.
The SEC chair then turned his focus to bitcoin, stating that it is “about half of this $2 trillion asset class right now.” He opined:
It’s a digital, scarce store of value, but highly volatile, and there’s investors that want to trade that … for its volatility, in some cases just because it is lower correlation with other markets. I think that we need greater investor protection there.
Gensler noted that currently there is no “federal regime overseeing the crypto exchanges,” unlike with stock and derivatives markets.
He emphasized that if investors want to trade cryptocurrencies, then the SEC needs to “have in place some investor protection.” He noted that this is “a gap in our system right now” that needs to be addressed.
Speaking solely about bitcoin and not any other tokens, Gensler explained that the SEC’s “sister agency, the Commodity Futures Trading Commission [CFTC] has limited anti-fraud and anti-manipulation authority.” Nonetheless, he reiterated that “There’s no federal authority to actually bring a regime to the crypto exchanges.”
The new SEC chair further noted:
We will be working with Congress, and if they see fit, to try to bring some protection for people that want to invest in this speculative asset class.