Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), said on the 21st that stablecoins, currency-backed cryptocurrencies, are similar to ‘poker chips’ and once again compared the $2 trillion crypto market to the ‘Wild West’.
These comments came during an interview with the Washington Post where he argued that most crypto-related projects deal with securities thereby falling into the regulatory confines of the SEC.
“These stable coins are acting almost like poker chips at the casino right now; so, add to the Wild West analogy. I mean, we’ve got a lot of casinos here in the Wild West and the poker chip is these stable coins, you know, at the casino gaming tables.”
He also remarked that private forms of currencies have turned out to be unviable in the long run.
While speaking with Washington Post columnist David Ignatius, Gensler reiterated his opinion on regulations of cryptocurrencies and noted that while CFTC and SEC are both ‘robust’ agencies of the US, CFTC is better suited for enforcement for others rather than cryptocurrencies.
Gensler has previously mentioned the need to regulate stablecoin. He explained that stablecoin is widely used in both transactions and lending, and pointed out that it may be used as a loophole in existing financial systems, bypassing anti-money laundering (AML) measures, and more.
Last week, Bloomberg reported that the US Treasury will soon publish a report on potential risks of stablecoins on cashing and bank runs. The news was reaffirmed by Gensler, stating that they are working under the guidance of Secretary Yellen to submit a report on ‘the world of stablecoins’.
Gensler reiterated many of his remarks and views on cryptocurrencies in the interview, noting that technologies don’t long last outside of a social and public policy framework.
He also commented on the need for crypto platforms to register with the regulatory body since many of them are dealing with securities. The same remark was made at the US Senate hearing on September 14.
“It’s highly likely that they have on these platforms securities investment contracts or notes or others that fit the definition of security. Those platforms should come in. They should figure out how to register, be it an investment investor protection remit.
Now, not many have. And so I do really fear that we’ll keep bringing these enforcement cases. But there’s going to be a problem. There’s going to be a problem on lending platforms or trading platforms. And frankly, when that happens, I think a lot of people are going to get hurt.”