Gary Gensler, nominee for SEC chairman and former head of the Commodities Futures Trading Commission, says, if confirmed, he will work with fellow commissioners to make sure concerns about crypto are addressed.
“Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion, but they’ve also raised new issues of investor protection that we still need to attend to,” said Gensler, nominee to head the SEC.
Bitcoin, the largest cryptocurrency by market cap, has seen its market value this year soar by 69% to $925.2 billion, according to CoinMarketCap.com, as Wall Street and corporate America have more widely adapted cryptocurrency investing. The global crypto market cap is $1.47 trillion.
If bitcoin and other cryptocurrencies were deemed to be securities, they would fall under the purview of the SEC. Exchanges that facilitate the trading of such cryptocurrencies would also need to have the appropriate investor protections in place, he said.
Bitcoin and other cryptocurrencies are currently considered to be commodities and regulated by the Commodities Futures Trading Commission.
Because cryptocurrencies are not regulated by the SEC, there is no clarity about how publicly traded companies that have invested in digital assets should treat them on their financial statements. Accounting standards for such investments are becoming more important as a number of public companies have recently begun investing in bitcoin.
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MicroStrategy Inc. has led the charge in crypto investing among public companies, recently amassing a $4 billion position in bitcoin that accounts for the vast majority of its cash. Other companies, like Tesla Inc. and Square Inc., have followed MicroStrategy’s lead, allocating less than 10% of their cash to the cryptocurrency.
Gensler doesn’t just view digital currencies as investment vehicles but believes they also provide useful technologies.
He told Wyoming Sen. Cynthia Lummis, a Republican, that blockchain technology, which underpins bitcoin and other cryptocurrencies, has been a “catalyst for change” in the world of finance.
He pointed to improvements in the areas of payments systems, trade finance, and medical-records technology as areas where blockchain has proven useful. Gensler is currently a professor at the Massachusetts Institute of Technology and teaches about blockchain.
“I’m neither a maximalist nor a minimalist, but I think that it’s really been a catalyst for change in numerous areas,” Gensler said.