Chairman Gary Gensler insists the SEC has no plans to ban crypto, but stablecoins are unlikely

The chairman of the US Securities and Exchange Commission, Gary Gensler, told the US Congress on Tuesday that the SEC had no plans to ban crypto.

SEC chairman Gary Gensler

Representative Ted Budd, a longtime proponent of cryptocurrencies and a member of the Congressional Blockchain Caucus, asked Gensler if the SEC had plans to follow China’s example in banning cryptocurrencies. that is left to Congress. ”

Gary Gensler claims the SEC is not banning cryptocurrencies, much like Fed chairman Jerome Powell said last week when the central bank chief told the House of Representatives Financial Services Committee that the Fed “has no plan.”

In fact, neither the SEC nor the Fed have the authority to ban crypto, only Congress, but the opinions and recommendations of these two agencies have an extremely important influence on the decision of Congress.

Questions from Congressmen about the SEC’s efforts to regulate cryptocurrencies come amid a growing debate over how the crypto industry should be regulated.

During his four-hour Congressional hearing yesterday, the SEC chairman raised concerns about crypto, stablecoins, regulation with exchanges, and DeFi.

Gensler largely reiterated his earlier thoughts on cryptocurrencies, including recommending exchanges to register with the SEC, the potential systemic risk of stablecoins, and that “most” cryptocurrencies of all electronic devices are classified as securities as defined by the SEC.

When asked by Congressman Jim Himes to provide guidance on crypto regulation, Gensler reiterated his previous position that crypto exchanges must register with the SEC, but added that decentralized exchanges (DEXs) will also be subject to regulations.

“Even with decentralized platforms – the so-called DeFi platforms – there is a centralized protocol. And while they don’t have the same regulatory powers as centralized exchanges, some executives on the team can still manage them, “the SEC chairman said.

Gensler also broadened his stance on stablecoins, which he previously referred to as “chip poker” at crypto casinos. Gensler exaggerated his poker chip analogy in answering several questions, adding that he viewed stablecoins as a systemic risk to the US economy.

“The $ 125 billion in stablecoins we have now are like poker chips in a casino,” said Gensler. It has increased tenfold compared to the previous year. I think if this continues to grow it could lead to systemic risk. ”

Gensler’s testimony comes a day after the SEC announced that Circle, the company that issued the USDC, had been served a “preliminary investigation” ruling from the SEC’s Enforcement Division since July.

Dark clouds are gathering in the stablecoin sky as the authorities have officially recognized it as a threat to the monetary system. But there is also the option of fully decentralized stablecoins such as DAI.

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Sherlock Holmes

According to Coindesk

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