Powell and Gensler agree: cryptocurrencies need better regulation
(Kitco News) - U.S. regulatory officials came out in full force Thursday to convey their intentions to reign in the cryptocurrency sector and bring some law and order to the nascent asset class.
Speaking at an industry conference, Gary Gensler, Chairman of the Securities and Exchange Commission (SEC), said he supports the idea of Congress giving more power to the Commodity Futures Trading Commission (CFTC) to regulate cryptocurrencies, "as long as it doesn't take away power from the SEC."
Gensler also noted that striking a balance with regulatory oversight given to the CFTC is important to assure it doesn't "inadvertently undermine securities laws" in the U.S.
These comments from Gensler come after the Senate Agriculture Committee, which is the regulatory body that oversees the CFTC, proposed legislation that would give the agency oversight of Bitcoin (BTC) and Ethereum (ETH), the two largest cryptos by market capitalization. Currently, the CFTC is only approved to regulate crypto derivatives markets.
Allowing the CFTC to handle BTC and ETH markets would free up the SEC to focus on regulating the rest of the crypto market since the agency has held firm in its assertion that all other cryptocurrencies are all securities and should be regulated by existing securities laws.
"Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities," Gensler said.
|Stablecoins and a digital dollar come into focus for the Fed|
Fed Chair Powell calls for stablecoin regulation
On the Federal Reserve side of things, Fed Chair Jerome Powell discussed stablecoin legislation during a live-streamed appearance at a Cato Institue conference on Thursday, saying that the sector needs to be "appropriately regulated" if it is to play a role in the global financial system.
"We need legislation on this," Powell said. "There isn't a regulatory framework that really gets after payment stablecoins, you know, and so I think that's what's needed."
These statements from Powell echo similar comments from regulators around the world, including the IMF to the Russian government, which have emphasized the importance of establishing a solid legal framework surrounding the use of stablecoins.
“We don't want to stand in the way of appropriate innovation … But we think that something like that which is purporting to be money would need to be appropriately regulated,” Powell said. “I think you need regulation. If people are going to think something is money it needs to have the qualities of money. I don't think you want to take money and make it into just another consumer product.”