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Regulation Needed for $2 Trillion Cryptocurrency Market, SEC Chair Says

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cryptocurrency regulation, Regulation Needed for $2 Trillion Cryptocurrency Market, SEC Chair Says, Global Economic Report

Asset Class Lacks Protections, Leaving Investors Vulnerable

September 1, 2021–Cryptocurrency platforms that provide direct access to millions of people leave investors “vulnerable” and are “rife with fraud, scams, and abuse,” according to Gary Gensler, chairman of the U.S. Securities and Exchange Commission.

Need for Public Policy

Speaking by videoconference to the European Parliament Committee on Economic and Monetary Affairs, Gensler warned that “financial innovations throughout history don’t long thrive outside of public policy frameworks.”

Gensler is not the first public official to warn about the inherent dangers of investing in cryptocurrencies. Policymakers are increasingly taking an interest. The Bank for International Settlements warned about the rapid rise of virtual and cryptocurrencies in the international marketplace in 2019.

Today, the head of the SEC added his voice to the growing chorus of policymakers who want to regulate the industry.

“While I’m technology-neutral, I am anything but public policy-neutral,” Gensler said. “As new technologies come along, we need to be sure we’re achieving our core public policy goals. Further, for those who want to encourage innovations in crypto, I’d like to note that financial innovations throughout history don’t long thrive outside of public policy frameworks.”

–SEC Chair Gary Gensler speaking to the European Parliament Committee on Economic and Monetary Affairs

Stablecoins Sidestep Policies

Also, Gensler noted the rise in the use of stablecoins–a type of cryptocurrency that uses tokens as an exchange. Facebook Diem is a popular example. The current stablecoin market is worth $116 billion, according to Gensler. The problem, he said, is that the tokens are increasingly exchanging with cryptocurrency platforms. Furthermore, he added, that helps people “sidestep a host of public policy goals,” such as anti-money laundering, “connected to our traditional banking and financial system.”

EU Working on Reforms

The European Parliament is working on a package of digital finance reforms. Germany’s Berger Stefan is leading the charge to create a legal framework that defines regulation for cryptocurrencies. The EU Commission adopted the Digital Finance package in 2020.

Regulation Needed for $2 Trillion Cryptocurrency Market, SEC Chair Says, Global Economic ReportCopyright secured by Digiprove © 2021 Patti Mohr
cryptocurrency regulation, Regulation Needed for $2 Trillion Cryptocurrency Market, SEC Chair Says, Global Economic Report

Patti Mohr

Patti Mohr is a U.S.-based journalist. She writes about global diplomacy, economics, and infringements on individual freedom. Patti is the founder of the Global Economic Report. Her goal is to elevate journalistic principles and share the pursuit of truth in concert with others.

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