Gary Gensler, SEC: "Cryptocurrencies as revolutionary as the Internet"
Yesterday, SEC Chairman Gary Gensler explicitly defined cryptocurrencies as a truly global asset class.
He did so during his virtual talk to the European Parliament’s Committee on Economic and Monetary Affairs, during which he shared his recommendations regarding the regulation of cryptocurrencies.
The aim was to promote cooperation between Europe and the United States to try to regulate decentralized finance technologies.
Gary Gensler (SEC): crypto like the Internet
But Gensler actually went even further.
In fact, at one point he commented on the role that new financial technologies are playing in the globalized financial system:
“I think the transformation we are experiencing right now could be as big as the internet was in the 1990s.”
Gensler is not the only one who thinks so.
It has long been assumed in the crypto community that decentralized finance is a potentially epoch-making revolution, especially since for the first time in history it removes the power to create money from politics.
Gensler is most likely interested in other aspects, particularly those related to regulation, given his role, but he is no stranger to these kinds of considerations.
In the past, he even gave courses at the famous MIT in Boston where he spoke about blockchain and decentralization.
During his speech at the European Parliament, he pointed out that crypto markets have no borders and are active 24/7.
Bitcoin mining and regulation
He also went on to talk about the energy consumption of Bitcoin, while pointing out that the popularity of cryptocurrencies based on Proof-of-Stake (PoS) is increasing.
One of the key points of his speech, however, was related to regulation.
He sees a fundamental need to develop strong regulatory frameworks that allow for some support for cryptocurrency and decentralized finance innovation, but keeping strong investor protection in place. This is likely to be the real challenge, much harder to do than to say.
For example, he pointed out that DeFi platforms allow millions of investors direct access without the presence of intermediaries, and this would pose great risks, as the crypto sector is rife with fraud, scams and abuse. In the absence of clear obligations to protect investors, they are indeed vulnerable when operating directly and in a disintermediate way on DeFi platforms.
He also added some concerns about stablecoins, given that almost three-quarters of trading volumes on crypto markets take place in tokens. Indeed, he explicitly described them as a useful aid for those trying to circumvent various regulations, such as anti-money laundering and international sanctions.
It is hard to imagine what kind of collaborations might emerge between US and European government agencies to try to regulate the elusive decentralized finance, but Gensler’s words seem to reveal quite clearly not only that institutions are now taking cryptocurrencies seriously, but that they are also beginning to realize their real revolutionary potential.
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