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BackAnother very welcome step in the right direction came today, this time from the United States and its government’s move toward deciding on a full framework for the regulation of the entire cryptocurrency industry.
Gary Gensler, who is the chairman of the Securities and Exchange Commission (SEC) in the United States is a very well recognized heavyweight. He was one of the commissioners who oversaw the complete overhaul of the investment banking and electronic trading business in the 2010s after the true cost of the global financial crisis had been counted, and was instrumental in advocating some of the most important policies that reformed Wall Street during the time of the Dodd Frank Act.
Today, Gary Gensler, now head of the SEC, is leading the charge for the regulation of cryptocurrencies across the board, has spoken out by boldly stating that although he remains ‘technology neutral’, he insists that the $2 trillion industry which is growing rapidly and has multiple facets ranging from trading to asset storage, to international trade settlement and smart contracts, is far too big to exist out of what he terms “public policy network”.
Speaking to the Financial Times earlier this morning, September 1, 2021, Gary Gensler said that there is no difference between crypto assets and any other asset when it comes to important areas of public policy such as investor protection, guarding against illicit activity and maintaining financial stability.
It is refreshing and reassuring to hear such decisive and definitive words from Gary Gensler, who has extensive expertise in implementing reforms and new regulatory policy which leads the United States’ fiscal policy and holds the country out as one of the most comprehensively regulated financial markets jurisdictions in the world.
CoinMetro is a staunch advocate of regulation and it is an intrinsic part of company ethos at CoinMetro to be pro-regulation and to ensure that we lead the way forward as a fully regulated cryptocurrency exchange with a fully regulated payment processing facility, having established the company with regulatory licenses from the outset.
As Gary Gensler quite rightly said, this is a huge and important industry, and its sustainability and growth can only be fostered with good quality regulatory frameworks in place which ensure best practice, client asset security and fully developed frameworks for the development of new technology to work within.
Let’s face it, cryptocurrency is a shining light in the development of all areas of the modern financial ecosystem. It is the development ground for the technology and financial dialog of the future. What is seen here in terms of DeFi protocols, exchange methodology, mining and blockchain functionality will filter down across the wider financial system just as Formula 1 race car technology is the proving ground for developments that make daily driving easier and more refined on ordinary sedans.
This is why Gary Gensler’s view is important. We stand by this approach and have the advantage of having began the business under full regulatory supervision, and understand that the more that regulated entities come into being, the better and more advanced the cryptocurrency world will become.
Gary Gensler said “At about $2 trillion in value worldwide, cryptocurrency is at the level and the nature that if it is going to have any relevance five to ten years from now, it’s going to be within public policy framework. History just tells you it doesn’t last long outside. Finance is about trust.”
Absolutely.
He also showed his distaste for companies that have entered the cryptocurrency arena without any regulation, saying that they should come and talk to the SEC. He said that there are a large number of unlicensed platforms today that exist, which would do better if they engaged with the regulators. His opinion is that there is a bit of “begging for forgiveness instead of asking for permission.”
We have seen what happens under these circumstances. Look at the drubbing Binance has been given by the British authorities, and now its product range is so non-compliant that the Financial Conduct Authority says it cannot regulate it even if Binance decided that it wanted to go down the regulatory route.
Therefore, starting off with regulation and adhering to it is the only way forward.
The cryptocurrency community certainly seems to agree. The sudden surge upwards in the value of Bitcoin and Ethereum after the US meeting on tax treatment and potential methods of regulation in the US, a nation in which cryptocurrency trading is an enormous phenomenon, created an incredible level of confidence in the most popular cryptocurrencies.
Given the customer proponency and Mr Gensler’s clear words, it is only a matter of time before we see the next big stabilizing feature, regulation.
Once that happens, cryptocurrency will hit the big time.