SEC Chairman Gary Gensler expressed skepticism about the widespread adoption of crypto as a means of payment, during an event at NYU School of Law.
Gensler doubts the future of crypto as mainstream currency
Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), recently expressed skepticism about the future of cryptos as a widely adopted medium of exchange.
At an event at NYU School of Law, Gensler declared that he was “ unlikely that this thing will become a currency“, referring to Bitcoin and other cryptos.
The former MIT professor based his reasoning on historical economic principles, dating back to Plato and Aristotle.
Gensler notably cited Gresham's Law, a 19th-century monetary principle stating that “bad money drives out good money.”
He also highlighted the tendency of nations to favor a single currency, explaining: “ We want a monetary unit because it is a store of value, a means of exchange, a unit of account. All of this has enormous network economic potential. »
According to Gensler, cryptos could continue to be seen as stores of value, but their use as a means of everyday payment remains unlikely. He added that their value will have to be demonstrated “ by disclosure, by use… In the same way that we choose among the thousands of securities listed on the stock exchange “.
The SEC maintains its firm stance in the face of sector abuses
Beyond adoption issues, Gensler was quick to highlight the fraud issues that persist in the crypto industry. He notably pointed the finger at certain emblematic figures of the sector, declaring that “ the luminaries of this field in 2024 are either in prison or awaiting extradition “.
This statement is a continuation of actions taken by the SEC to crack down on illegal activities related to cryptos. Gensler reaffirmed his agency's commitment to protecting investors, emphasizing the need for a police presence on the ground to enforce the laws.
The SEC Chairman also maintained that the current regulatory framework, including the Howey Test established by the Supreme Court in 1940, was sufficient to assess the legal status of cryptoassets. He explained in detail why this test remains relevant even for modern digital assets.
Gensler emphasized that the SEC takes a “merit-neutral” approach to the underlying technology, leaving it up to the investing public to decide the usefulness of a given cryptocurrency, provided appropriate disclosures are made.
In conclusion, Gary Gensler's statements raise important questions about the future of crypto and their place in the financial system. While some welcome its firmness in the face of abuses in the sector, others see it as a potential obstacle to innovation. The debate even extends to the political arena, with Donald Trump promising to fire Gensler if he is re-elected president.
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