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U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said that it is unlikely that Bitcoin (BTC) or another cryptocurrency will become a widely used means of payment.
Gensler made the remarks at a recent event held at the Law Department of the New York University, industry media Coindesk reported. Gensler also claimed that there is no need for further regulatory clarity beyond the Howey test approved by the Supreme Court back in 1940.
Gensler doubts cryptocurrencies
The SEC Chairman was asked by an attendee what a cryptocurrency’s value is, especially considering that it was created to be independent of all governments. Gensler explained that the public would decide it with its capital. Still, he suggested that he does not expect cryptocurrency to ever see significant adoption:
“But I did teach this stuff up at MIT and so forth, so I’m just going say this — these debates literally go back to Plato and Aristotle. […] This is 3,000 years of history. Hundreds of great nations, thousands of nation-states — we tend to have one currency per geographic economic state. We tend even not to have bimetallism.”
The SEC official also cited Gresham’s law, a monetary principle asserting that “bad money drives out the good,” also highlighting that nations usually want just a single currency. He explained further:
“You want one currency unit because it’s a store of value, a medium of exchange, a unit of account. It all has tremendous economics of networks. […] So it’s unlikely this stuff is going to be a currency. It’s going to have to show its value through disclosure, through use. […] The same way you pick amongst the thousands of securities that are listed on the stock exchange.”
Gensler also defended the SEC’s aggressive regulation through an enforcement approach to cryptocurrencies. He asked the audience:
“Without a cop on the beat, will all our laws be enforced?”
According to him, due to human nature in finance, people tend to “play near the line,” and regulators “sometimes need to take enforcement actions to bring people back to the right side of the line.” He further highlighted that the crypto industry attracted a high number of fraudsters and scammers and claimed:
“With all respect, the leading lights of this field in [2024] are either in jail or awaiting extradition right now.”
