Bitcoin

Bitcoin Competing with the US Banking System

Bitcoin is a challenge to the United States’ banking system and its global consensus, according to Securities and Exchange Commission (SEC) Chairman Gary.

The Securities and Exchange Commission (SEC) Chairman Gary Gensler stated on Wednesday, 1st December that Bitcoin is a rival to the US financial system and its global consensus.

Gensler spoke at the DACOM Summit 2021, a live-streamed regulatory and marketplace integrity event on Wednesday. The SEC chairman was joined by Jay Clayton, who served as the commission’s chairman a few years ago, for a discussion about Bitcoin, cryptocurrency, digital assets, exchange-traded funds (ETFs), and decentralised finance.

Digital money system was overlaid with money laundering and various sanctions and regimes around the world approximately 40 years ago – it was stacked over a digital currency system called banking system. 

Throughout the discussion, the SEC chairman maintained a clear distinction between Bitcoin and digital assets. While Gensler would not endorse one over the other, he did recognise their contrasts, emphasising the securities-like nature of many initiatives. These have primarily been used to raise funds for businesses, and as such, fulfil the time-tested concept of an investment contract and hence come under the securities laws.

Gensler has repeatedly stated that the bitcoin business is a “Wild West.” He asked the “gatekeepers” of the numerous cryptocurrency initiatives in operation to find a way to join and fall under the purview of the investor protection mandate. Such ventures, whether a trading platform or a coin, are “not going to evolve well outside of the tenets of public policy.” he said.

When discussing digital assets, Gensler stated that such innovations, in his perspective, actually exist and do not require decentralisation to work. The SEC chairman also made comparisons between the US dollar and the idea of digital currency, trying to downplay the discrepancies.

The US dollar, euro, and yen, as well as the majority of publicly traded firms, are all digital. When you purchase and sell digital equities, you are also buying and selling digital treasuries; there really is no longer any physical treasury debt. These are what Gensler refers to as digital assets. However, Gensler did not completely deny the existence of certain other digital assets. Finally, he stated, it is up to investors to pick what is worth their investment. Nonetheless, he expects precise and plain data on each project’s aims and offers. In terms of “investor protection and fraud prevention,” Gensler emphasised the significance of “full and fair disclosure.”

The SEC chairman also stated that his agency is working with sister agencies such as the Commodity Futures Trading Commission (CFTC) to determine how US marketplaces and regulatory authorities should handle various tokens.

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