Cryptocurrencies Will Not Replace National Currencies, SEC Chairman Says

US Securities and Exchange Commission (SEC) Chairman Gary Gensler has expressed scepticism about the use of Bitcoin (BTC) or other cryptocurrencies as a form of payment.

He believes they are more likely to be seen as a store of value rather than a replacement for national currencies. Drawing on historical context, Gensler highlighted the tendency of countries to maintain a single currency due to its crucial role as a store of value, medium of exchange and unit of account.

He invoked Gresham’s law, a 19th century principle, to argue that “bad money drives out good money“, reinforcing the importance of national currencies over alternatives such as cryptocurrencies.

As for the broader crypto landscape, Gensler noted that the SEC remains “merit neutral” and relies on the public to decide whether specific cryptocurrencies are useful through appropriate disclosure.

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However, he reaffirmed the SEC’s commitment to enforcing fraud prevention laws, stressing that the crypto industry is rife with scams, fraudsters and scammers. The Chairman defended the SEC’s regulatory position, citing the Howey test as the basis for determining whether a crypto asset qualifies as a security.

In closing, Gensler emphasized the need for enforcement to ensure market integrity, but declined to speculate on how future political changes, such as Trump’s re-election, could affect his position or the SEC’s approach.

Alexander Stefanov