Amidst the rollercoaster of the crypto market, one name continually stands out in the digital asset industry: U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler. Gensler’s association with MIT’s acclaimed ‘Blockchain and Money’ course once positioned him as a supporter of blockchain innovations, stirring some optimism in the crypto world. His appointment as the SEC chair in April 2021 was greeted with hope, but that optimistic sentiment seems to be waning.
Reflecting on Gensler’s teachings, it’s clear he maintains a belief in blockchain’s potential to transform the finance world. Illicit activity, safeguarding financial stability, and investor protection were core themes of his curriculum. However, his recent statement — dismissing the need for more digital currency, presents a contrasting stance.
Gensler’s focus on the regulatory role of intermediaries in the crypto space has been grimly highlighted in recent incidents. Notable exchanges such as Coinbase and Binance have been targeted with SEC enforcement actions, accused of operating as unregistered securities exchanges and brokers. These events reflect the SEC’s regulators’ priority: control systemic risks by focusing on intermediaries.
What stands out is the major disconnect between Gensler’s instruction and the crypto environment. His focus on ‘messaging’, ‘coalition building’, and less on analysis during policy crafting seems to alienate him from crypto advocates. While crypto enthusiasts focus on digital asset efficiencies, consensus mechanisms and supply dynamics, policy crafters steer the narrative their own way. One might argue, the primary critics of the crypto world know and understand its potential benefits, but choose to sway the narrative to fit their own agendas.
The case of the XRP token, usually associated with frictionless global finance, epitomises this. Following the SEC’s 2020 declaration of XRP as a security, the esteemed crypto was largely delisted. However, after Ripple, the company behind the token, contested the ruling, XRP received a significant boost, renewing hopes in its potential to revolutionise cross-border remittances.
Ultimately, Gensler’s current influence has real consequences for the future of digital assets. His example, once again, underlines how regulatory actions can adversely impact the fast-paced crypto world. Yet, as discussions around digital bonds and asset digitization seep into mainstream finance, his role in framing the narrative around crypto regulations becomes more important. Is Gensler the strict disciplinarian bringing order to a wild west market, or a roadblock to blockchain’s transformative potential? Only time can tell.
Source: Coindesk
