SEC chairman compares stablecoins with poker chips in casinos
The chairman of the US Securities and Exchange Commission(SEC chairman), Gary Gensler, has doubled his “Wild West” analogy to cryptocurrencies and called stablecoin tools for gambling in casinos as durable.
Speaking to Washington Post columnist David Ignatius, Gensler said Tuesday that most of the projects in the crypto space deal with securities that are under the control of the SEC, while the Commodity Futures Trading Commission, hybrid, or CFTC, is more likely is suitable for enforcement against others. The SEC chairman described the authority of both agencies as “strong” but said there were gaps in coverage, particularly with stablecoins that “could have the characteristics of an investment contract”.
“Stablecoin works almost like poker chips in a casino at the moment,” said Gensler. “We have a lot of casinos here in the Wild West and the poker chips are those stablecoins on the casino gaming tables.”
Gensler suggested that both the SEC and the CFTC would benefit from “help from Congress” in regulating and enforcing stablecoins. However, according to the SEC chairman, the existing laws seem broad when it comes to dealing with a modern financial instrument like cryptocurrencies.
“I’m really afraid we’ll keep bringing up these compulsive cases, but there will be a problem. There will be problems on credit platforms, on trading platforms. In all honesty, I think a lot of people get hurt when that happens. “
The SEC chairman’s statement comes after major U.S. crypto exchange Coinbase announced that it would be dropping its plans for a crypto loan program. The SEC previously threatened legal action against the exchange, stating that it views the program as a security measure.
Related: The SEC chairman doubles as he calls on the crypto firms to “come and talk to us.”
Cointelegraph reported in August that Gensler hopes to introduce crypto-related policy changes in token offering, decentralized funding, stablecoins, custody, exchange-traded funds, and lending platform. He has long urged crypto projects to register with the SEC, and specifically says that they should work with regulators to survive in the long term.