- Gary Gensler’s nomination as SEC chairman excites many crypto enthusiasts.
- The MIT professor hinted that the commission under his watch would be focused on “investors’ protection.”
- SEC Chairman says that cryptocurrencies are a catalyst for change.
Finally, the Presidential nominee for the chairman of the leading financial regulator, the US Securities and Exchange Commission (SEC), Gary Gensler, has had his confirmation hearing. In a matter of days, he would be confirmed as the body’s substantive chairman. When news of his nomination broke out midway through January, many crypto enthusiasts were filled with optimism because Gensler was renowned for his pro-crypto stance.
Their enthusiasm wouldn’t have been misplaced, considering the crypto industry just endured four years under Jay Clayton, who had a seemingly one-sided view of cryptocurrencies as a whole. No doubt, the level of excitement would have shot through the roof after Gensler categorically stated, during his confirmation hearing, that “cryptocurrencies are innovations that have been a catalyst for change,” while adding that “Bitcoin and other cryptocurrencies have brought new thinking to payments and financial inclusion.”
The truth is no one knows the stance the commission is going to take about crypto in the next four years. We have no idea of the plans or the changes Gensler could affect concerning how the body deals with digital assets, but crypto enthusiasts have their hopes high.
Why crypto-enthusiasts think Gensler will be different
There is no fire without ashes, neither are there any rumors without a tinge of truth in them. Crypto enthusiasts believe the Massachusetts professor would be different from his predecessor because he lectures about cryptocurrencies and blockchain at the Ivy League school. This, they believe, would make him better understand how the technology guiding the field could lead to the growth of the financial system and also accelerate the adoption of virtual assets by members of the public.
His previous stint as the Commodity Futures Trading Commission (CFTC) chairman under President Obama showed that he is pro-regulation. Under him, the CFTC approved around 70 new regulations to guide the players of the industry. This is expected to also play out in his new role as the SEC chairman as crypto enthusiasts believe that we would finally be seeing the needed regulatory clarity that market players have always clamored for.
Interestingly, the call for clarity is higher presently than in previous years, primarily due to the entrance of more institutional investors like Tesla, BNY Mellon, Microstrategy, and a host of others who are now investing in cryptocurrencies. The ongoing litigation between the commission and Ripple over the XRP token has also led to an increased demand for the authorities to do better in offering firm guidance for the industry.
There is no denying that both skeptics and cryptocurrency supporters alike strongly believe that regulations will do the industry some good. If the sector’s gray areas are cleared up, it could give rise to more adoption, which is a big plus to the general crypto asset market.
If any man can bring these much-needed regulations to pass, then it will be Gary Gensler. With this, he will be going in a different direction from the former SEC Chairman, Jay Clayton, who expressed his opinion on initial coin offerings being security for years but never made any regulatory move to guide investors on how and when tokens can be considered to be securities.
What should we expect from Gensler’s chairmanship?
Like we mentioned earlier, we can expect Gensler to offer more regulatory clarity to the burgeoning crypto industry. His actions and inactions would shape how the commission handles the crypto industry for, at least, the next four years. Although there is every probability that some of the regulations he might propose might not be welcomed by crypto enthusiasts, we can at least be sure of more laws.
During the confirmation hearing, he hinted that he would focus his chairmanship on investor protection. In his words, he would seek to “promote technology but still stay true to our core values of investor protection and capital formation.” This means that the commission under him, though it might have a pro-crypto view, wouldn’t be sacrificed to protect investors’ investment in the field.
With his confirmation in earnest, the first issue he would be facing would be the SEC and Ripple case. His previous comments that he believes XRP is a security plus whatever turn the case takes under his stewardship could prove to be a litmus test of what his tenure as chairman of the commission would be like.
We can’t but share the high hopes and the enthusiasm many crypto market players have shown since it appeared that Gensler was going to be taking over the SEC. His pro-crypto views have been stated continuously, and many believe this is the big break the crypto space has been waiting for.
Undeniably, Gensler has been quoted several times for dishing out statements that can be termed to support cryptocurrencies. However, it is a different ball game when you get to the driving seat to direct the affairs. Regardless of this, crypto investors can expect the commission to adopt a newer and fresher approach to its dealing with the crypto community for the next four years, at least.