U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler told Congress on Tuesday that the SEC has no plans to ban 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 to follow China’s lead in banning cryptocurrency in favor of a potential central financial institution digital foreign money (CBDC), Gensler mentioned, “No, that would be up to Congress.”
Gensler’s assertion that the SEC doesn’t plan to ban crypto mirrors related remarks made by Federal Reserve Chair Jerome Powell final week, when the central financial institution head informed the House Financial Services Committee that the Fed had “no plans to ban” the $2.2 trillion asset class.
Questions from Congress in regards to the SEC’s efforts to regulate crypto come amid a rising debate on Capitol Hill about how the business and its numerous components, together with exchanges and stablecoins, needs to be regulated.
During Tuesday’s four-hour listening to, Gensler fielded questions on cryptocurrency, stablecoins, the regulation of exchanges and decentralized finance (DeFi).
Gensler principally reiterated his earlier ideas on crypto regulation together with the necessity for exchanges to “come in and register” with the SEC, the potential systemic danger posed by stablecoins and the necessity for them to be topic to elevated regulation, and that “most” cryptocurrencies fall beneath the definition of a safety.
However, Gensler additionally expanded on his understanding of the SEC’s authority to regulate the crypto business.
When requested by Rep. Jim Himes (D-Conn.) to present “guidance” on the subject of crypto regulation, Gensler reiterated his earlier place that crypto exchanges want to register with the SEC however added that decentralized exchanges (DEXs) would even be topic to rules.
“Even in decentralized platforms – so-called DeFi platforms – there is a centralized 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 additionally expanded on his stance on stablecoins, which he has beforehand known as the “poker chips” on the crypto “casino.” Gensler doubled down on his poker chip analogy throughout his response to a number of questions, including that he considered stablecoins as a systemic danger to the financial system.
“The $125 billion of stablecoins we have right now are like poker chips at a casino,” Genser mentioned. “I do think that if this continues to grow – and it’s grown about tenfold in the last year – it can present those systemic wide risks.”
The assertion 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 worth of bitcoin, already up on the day, appeared to soar additional on Gensler’s feedback, rising to as excessive as $51,678.20. In current buying and selling, the value of the main cryptocurrency was at $51,329.82, up 4.59% within the final 24 hours.
UPDATE (Oct. 5, 20:57 UTC): Adds additional Gensler remarks, bitcoin worth motion.