Gensler, however, notes that a ban could be imposed by the US Congress if it chooses
The US has no plans to ban cryptocurrencies in the same way as China, the Securities and Exchange Commission (SEC) Chair Gary Gensler confirmed on Tuesday.
The SEC chief said this during a House Committee on Financial Services hearing.
The comments came as part of a reply to Rep. Ted Budd, who had asked Gensler whether the regulator was thinking of taking the route of China in banning cryptocurrencies in the United States in a bid to have a successful central bank digital currency (CBDC).
In his response, Gensler said the securities watchdog cannot ban crypto and had no such plans. He added that imposing such a ban “would be up to Congress“.
The SEC Chair’s comments about cryptocurrencies mirror those Federal Reserve Chair Jerome Powell made to Congress last week. The Fed Chair told lawmakers during the House Financial Services Committee hearing that there was no plan to impose a ban on cryptocurrencies.
SEC eyeing regulation of exchanges and stablecoins
While the Fed and the SEC both express no desire to ban Bitcoin and other cryptocurrencies, Gensler wants to see the sector properly regulated. In a response to a question on regulation, the SEC boss noted that although new technology could be revolutionary, it can only thrive when it falls within a regulatory framework.
Gensler also eyes stringent regulatory measures against cryptocurrency exchanges and projects within the decentralised finance (DeFi) space.
One way of ensuring regulatory oversight in crypto is to have exchanges register, the SEC Chair added. This should include decentralised exchanges (DEXs) that “don’t take custody” but still have a centralised protocol and thus need greater public policy.
Another area Gensler expounded on was the issue of stablecoins and crypto tokens. For the former, the regulator believes they can pose system risks, while a majority of tokens could end up being classed as securities.
Despite these comments, the regulatory outlook for crypto in the US remains unclear, which is a factor that’s keeping several mainstream companies from trading crypto. According to Gensler, the regulatory environment will quickly streamline if there’s coordination between the Commodities Futures Trading Commission (CFTC) and the SEC.