As debate rages over the legitimacy of Bitcoin as a currency, SEC Chairman Gary Gensler recently highlighted distinctions between crypto and fiat currencies like the US dollar. His response once again resonates as a criticism of Satoshi’s invention.
Gary Gensler speaks on Bitcoin, the US dollar and ETFs
On January 10, 2024, SEC Chairman Gary Gensler announced his green light for Bitcoin Spot ETFs, paving the way for mass adoption of the cryptocurrency. However, behind this apparent benevolence, Mr. Gensler has continued to express doubts about the legitimacy of Bitcoin.
This is what his recent media outings suggest, notably his interview from January 14 on CNBC. Indeed, Mr. Gensler insisted on the fact that traditional currencies like the dollar are supported by central banks which follow monetary policies aligned with economic zones. Bitcoin, on the other hand, does not have this kind of institutional anchor.
“ You have a central bank and you support a currency, usually by economic region. What we don’t have here [dans le bitcoin] », said Mr. Gensler. This difference would create, according to him, “a very real economic difference” between these two asset classes.
Criticism of decentralization
Some supporters of bitcoin highlight its decentralized nature to justify their confidence in this digital currency compared to currencies issued by central banks. Mr. Gensler questions this argument.
“ Bitcoin is not that decentralized“, he says, explaining that finance has historically always tended to centralize. In fact, only a small group of cryptos currently dominate the market.
Additionally, Gensler points out that blockchain recordkeeping has never been a deciding factor for most traditional investors. What matters most to them is the value and reliability of the underlying asset.
Bitcoin, a speculative asset, really?
Asked about the use cases of Bitcoin outside of ransom payments, Mr. Gensler adds: “speculative investment”. In other words, its value would be based more on speculative movements than on real economic utility, which makes it a high-risk asset.
This statement is in contrast to the recent approval of Bitcoin Spot ETF by the SEC itself. Mr. Gensler, however, denies promoting cryptocurrency: these funds only aim to regulate exchanges, without making a “value judgment” on Bitcoin.
Ambiguity of the regulator or ignorance of Bitcoin? Crypto supporters could see this as a lack of perspective on the future of this asset. Regardless, the SEC president’s comments highlight the challenges that still await the queen of cryptos before widespread adoption.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
