The cryptocurrency market has been through a lot right now. These days have been quite difficult and concerns about what will happen to cryptocurrencies in the future are mounting. And if that weren’t enough, to this whole situation we have to add the most recent statements from SEC chairman Gary Gensler.
Gary Gensler recently gave an interview and the topic of cryptocurrencies was one of the topics discussed. On this occasion, the SEC chairman assured that cryptocurrencies were highly speculative assets. Therefore, they should be regulated as if they were securities and not other asset classes.
Gary Gensler’s plan is to provide investors with high security standards. Remember that the United States is the country where we invest, exchange and mine most of the cryptocurrencies in the world. With this in mind, it is more than clear that a large number of US citizens are at risk if the cryptocurrency market is not as safe as it should be.
In the case of the United States, the issue of cryptocurrency regulation came a little late especially when we compare this country to others stronger in economics, technology and law. And while it took longer than anyone thought, the regulations they are drafting may be the most appropriate, especially if they go the regulatory route of recognizing cryptocurrencies and not banning them like China has done in the past.
Regulations will protect investors
In this scenario, at least for Gary Gensler, investors in the market are the most unprotected and suffer the most. This is true for investors at various levels, but especially for retail investors. The SEC chairman said that these cryptocurrency investors are not fairly and fully covered.
For him, investors should not be considered holders of cryptocurrencies as it is money, a digital wallet and an exchange platform and it is quite similar to a standard transaction carried out through regular channels. Once investors benefit from more certainty, the market will be much more successful and citizens will be better protected.
Among Gary Gensler’s statements, he noted that cryptocurrencies are not as decentralized as we’ve been led to believe. For him, there are a large and very large number of trading and lending sites that trade in a large number of cryptocurrencies that can make the price fluctuate and cause variations in the status of these assets.
Furthermore, he pointed out that some cryptocurrency platforms consistently go to investors only for trading, but rarely for protection. If the platforms actually supported tokens, they wouldn’t have to worry about creating a market that ultimately impacts investors.
Stable currencies will also be regulated
And as expected, the topic was brought up for Terra, which was the third largest stablecoin in the world and was undergoing a total collapse causing millions of losses to the cryptocurrency market. When people talk about cryptocurrencies, they sometimes think a lot more about decentralized currencies due to their high volatility, but Terra has shown that regulation can be needed for this asset class as well.
In this regard, Gensler argued that stablecoins should also be regulated. He claims that stablecoins are typically used to buy and sell other cryptocurrencies, and are in fact held by crypto exchanges. This means individual investors are barred from direct trading and their hands are virtually tied.
In the past, Gensler has been a leading advocate for cryptocurrency regulation and has repeatedly tried to put cryptocurrencies in a really good place. One of the biggest challenges for regulators is defining a category for cryptocurrencies, and many still don’t know where to put them, but Gensler’s idea is to give them the quality of a valuable asset, which could be quite positive. are for cryptocurrencies.
If cryptocurrencies are considered a valuable asset by law, then national laws will also apply to the use of cryptocurrencies. While it probably won’t stop the fluctuation of cryptocurrencies like bitcoin, it could raise security standards to prevent some illegal activities, and by recognizing cryptocurrencies, it would lead to more investment and a much more profitable market in the medium and long term.
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