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Lawmakers are like it doesn’t matter whether cryptocurrency or Bitcoin is a stock token, a stable value token backed by securities, or any other virtual product that facilitates synthetic exposure to underlying securities. All of these products are subject to securities laws and should work within our regime.
SEC head Gensler stated, “We just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West. This asset class is rife with fraud, scams, and abuse in certain applications.” Further stated, “I came to believe that, though there was a lot of hype masquerading as reality in the crypto field, Nakamoto’s innovation is real.”
The public statement from Chair Gary Gensler is titled, “Remarks Before the Aspen Security Forum.”
While Gensler made these statements, he made it very clear that the views are his own. And that he was not speaking on behalf of the Commission or the SEC staff.
From the statement made, it looks like Chair Gary Gensler understood the following:
Nakamoto solved the riddle of moving something of value in the internet without a central intermediary like the Central Intermediary of the commercial banks. He also solved the problem of double-spending.
Bitcoin and cryptocurrency could continue to be a catalyst for change in the fields of finance and money.
Nakamoto has been trying to create private money that can function and be of use without a central intermediary like central banks and commercial banks.
We are already interacting with digital monies like the Dollar, Euro, Sterling, Yen, and Yuan. Public fiat monies already fulfill the three functions of money: a store of value, unit of account, and medium of exchange. There is no single crypto asset that fulfills all the functions of money.
Cryptocurrencies are vehicles for speculative investment and are therefore speculative stores of value. They have not been used as a unit of account.
Crypto is not used much as a medium of exchange. To the extent it is used, it’s often to skirt laws concerning anti-money laundering, sanctions, and tax collection. It enables extortion via ransomware like in the Colonial Pipeline.
Being public policy-neutral and technology-neutral, it is important to achieve public policy goals.
In finance, it is about protecting investors and consumers against illicit activity to provide for financial stability.
SEC fits into this place in the process of facilitating capital formation; maintain fair, orderly, and efficient markets; contribute to financial stability, and, ultimately, investor protection.
