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Highlights
- The Securities and Exchange Commission (SEC) chairman Gary Gensler at a House Committee on Financial Services hearing said that it would be up to Congress to decide whether to ban cryptocurrency or not.
- Gensler has been pretty vocal about the need for tighter regulations for cryptocurrency in order to protect investors.
- Cryptocurrency has seen a roller coaster ride this year with the total capitalisation of cryptocurrencies worldwide touching US $2.18 trillion on Wednesday.
In what can be considered as cold feet, the US Securities and Exchange Commission chairman Gary Gensler indicated that the decision to ban cryptocurrency would be taken by Congress and not the Security Exchange Commission (SEC). Speaking at the House Committee on Financial Services hearing, the SEC chairman’s comments coincided with Bitcoin touching US $50000.
A few days back, China had banned cryptocurrencies in the country, raising speculations that US too could follow. The speculations were raised amidst the news of a bill that aims to regulate the market. Similarly, other countries such as Brazil too are considering regulating cryptocurrencies instead of banning them. In fact, Cryptocurrency has had seen mixed fortunes this year, with the worldwide market capitalisation touching US $2.18 trillion on Wednesday.
Also read: What makes Coldstack crypto a potential investment opportunity?
Gensler and his regulatory vision
Gensler has been very vocal about the need for tighter regulations in the past. Having said that, Gensler was of the view that SEC doesn’t have the authority or the intention to ban cryptocurrency. Gensler aims to ensure that the increased cases of financial frauds and investors losing money are reduced through tighter regulations. Gensler said the bank regulators, Treasury department all need to work hand in hand to ensure investor consumer protection.
One of the main issues that Gensler has had with cryptos, especially with stablecoins, is that as they are not regulated, they do not meet the test of being an investment contract. Therefore, SEC has taken up the issue of financial stability needs to be taken on priority by the agency.
Voices not to ban cryptos grow in US
The sentiments for not banning cryptocurrencies in US has in fact, been growing, with many decision makers now making the voices clear when it comes to digital currencies. While many dubbed it a highly manipulative market, only a few days ago, the US Federal Reserve Chairman Jerome Powell indicated that the government has no plans to ban Bitcoin and other cryptocurrencies now or any time in the near future.
Also read: Binance Trading Volume On The Rise Despite Crackdown
Powell’s comments could also be an indication of US’s plan to consider launching its own CBDC (Central Bank Digital Currency). Although the Federal Reserve hasn’t indicated any time frame for that, many in the Fed Reserve quarters believe that the Digital Dollar would make the financial system within the country stronger, especially post the Covid-19 setback. The team is still in the process of studying the feasibility of its inclusion in the day-to-day financial system.
Conclusion
It’s clear US does consider cryptocurrencies and Dollars can coexist provided that they are well-regulated and managed. Gensler’s latest stance comes as refreshing news for the market, and the market too has reacted positively towards it. Bitcoin, for the second time in two days, is trading above US $50000 and is currently trading at US $50,721.06, securing a 24-hour high of 0.93 at the time of writing (BST 11:09 a.m.).
The participants would now hope that both the market and governments stay on the same page for this market to propel to newer heights.
