In what is his latest attempt at undermining the significance of stablecoins, United States Securities and Exchange Commission Chair, Gary Gensler has described it as instruments for gambling at old-timey casinos.
Gensler, who has an history of using various wild west analogy to describe cryptocurrencies, made his latest remark while speaking to foremost Washington Post columnist, David Ignatius on Tuesday.
“We’ve got a lot of casinos here in the Wild West, and the poker chip is these stablecoins at the casino gaming tables,” Gensler said.
He argued that a large number of cryptocurrencies projects are engaged in securities that fall within the regulatory scope of his agency while the Commodity Futures Trading Commission, or CFTC, was better suited for enforcement for others.
Explaining the rationale behind his argument, he noted that both agencies have robust regulatory powers that covers a wide range of issues. He was however quick to note that there are significant gaps in their coverage particularly for stablecoins, which he says may have attributes of investment contracts.
Gensler also used the platform to hint that there is a need for the US congress to help the two agencies — SEC and CFTC design a better framework for the regulation and enforcement of stablecoins.
The need for this framework, he explained, is necessary because the laws currently in place are seemingly broad on how to handle a modern financial instrument like crypto.
I do really fear that we’ll keep bringing these enforcement cases, but there’s going to be a problem. There’s going to be a problem on lending platforms, on trading platforms. Frankly, when that happens, I think a lot of people are going to get hurt.
