SEC Chair, Gary Gensler, has categorically stated that the SEC has no plans to ban crypto in any shape or form. This was in reply to a query from a Senator in Congress on whether the US had any plans similar to China to totally ban cryptocurrencies in the US. This is indeed a total turning of the tables as till a year or so back, it looked more likely that the US would ban crypto while China would embrace the growing demand and power of cryptocurrencies.
Mr. Gensler also said that it would be up to the Congress to decide whether it wanted to ban crypto or not but that looks unlikely at this point though there could be a push to central bank digital currencies (CBDCs) from the US in the coming months. This could also be a part of the overall strategy to use the digital dollar to reduce the relevance of crypto rather than ban it outright.
Right now, cryptos are being mainly used for speculation in many crypto exchanges and we are at a very early stage as far as its mainstream usage and adoption is concerned. Only a few businesses around the world have allowed payments in crypto but even those moves by the businesses seem to be more of a marketing gimmick rather than any serious adoption of crypto for its utility. Central banks around the world are more receptive of using a digital version of their own fiat currencies as they believe that they would be able to control and regulate it much more as they would be the issuers of the same, unlike the private cryptocurrencies.
They would also hope that when provided with an alternative, government backed digital currency, users would be more likely to choose the CBDCs rather than the existing private cryptocurrencies and this would help to stem the mainstream adoption of these cryptos and force them to be restricted for trading purposes only.
The comments from Mr. Gensler seems to be very similar to the comments from the Fed Chairman Jerome Powell last week where he had also made it clear that there were no plans to ban crypto. It is likely that the SEC would be looking to regulate crypto in the long run with the SEC Chair asking for the crypto exchanges to come forward and get registered and licensed with the SEC which would be a win-win situation for the SEC as well as the crypto exchanges in the long term.Leave a comment