Gary Gensler, the Chair of the U.S. Securities and Exchange Commission (SEC), has expressed the view that BTC and other cryptocurrencies are unlikely to become widely used payment methods. Instead, he believes they will continue to be seen as stores of value.
At an event at NYU Law School in Manhattan on Wednesday, Gensler responded to a participant's question about the value of cryptocurrencies - designed to be separate from any government - if they are fully within a regulatory framework. He emphasized that the SEC maintains a "neutral stance on value" and that the investing public will decide - through disclosure - whether cryptocurrencies are useful.
"These debates really originate from Plato and Aristotle. This is a 3,000-year-old history. Nations tend to want to have a single currency for each economic area."
He cited Gresham's law, a monetary principle from the 19th century, which states that "bad money drives out good," and argued that nations typically want only one currency.
"People want a unit of account because it's not just a store of value, but also a medium of exchange and a unit of account. It's all about the network economy," Gensler explained. "So it's very difficult for cryptocurrencies to become currencies. They need to demonstrate their value through disclosure and practical application, just like how you choose from thousands of securities in the market."
In a wide-ranging discussion with NYU Law Professor Robert Jackson, Gensler defended the SEC's enforcement track record against the cryptocurrency industry.
"Without law enforcement, how can we enforce the rules? In finance, people tend to play near the edge of the cliff. Sometimes enforcement is needed to bring people back to the right path."
He pointed out that the cryptocurrency industry currently has "a lot of fraud and abuse," emphasizing that "many leaders in this field are facing legal action in 2024."
Gensler asserted that he does not see the need to establish any additional legal framework beyond the Howey Test established by the Supreme Court in 1940.
"If someone wonders if they meet this test, ask yourself: Who is signing the legal agreement with your law firm? Is there a central business?"
Finally, Gensler declined to comment on the impact of the upcoming presidential election on the SEC, as well as the possibility of resigning if former President Trump is re-elected.
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According to Coindesk
