It’s Gary’s day.
Gary Gensler, a former head of the Commodity Futures Trading Commission, is due before the U.S. Senate Banking Committee Tuesday to discuss his nomination to head to the SEC.
The testimony will be closely watched for clues as to how Gensler might regulate cryptocurrency and related technology.
We could use some guidance.
This article is excerpted from The Node (formerly known as Blockchain Bites), CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.
The SEC has been criticized for both failing to clamp down on dodgy crypto (during the 2017 ICO boom) and for being too cautious about green-lighting legitimate activity.
Will Gensler be more open to innovation? A CoinDesk op-ed from 2019 suggested so. And, from Gensler’s background, it seems likely.
Former SEC Branch Chief Lisa Bragança noted on CoinDesk TV today that, unlike the former chairman, Jay Clayton, Gensler is not a lawyer. He can see the bigger picture beyond technical details.
“I think we are well on the way to having [a BTC ETF] in the U.S. A lot of the concerns the SEC has raised in the past are again coming from the perspective of … very cautious lawyers,” she said.
That doesn’t mean Gensler, if confirmed, will be a soft touch. Bragança said in the same conversation the SEC is worried about the recent spate of companies buying big into bitcoin.
The likes of MicroStrategy, which has bought almost 91,000 BTC with a current cumulative value of $4.3 billion, may be creating default ETFs before ETFs are approved. There is “huge concern that companies are turning themselves into crypto bitcoin ETFs,” she said.
With the crypto industry going full tilt, Gensler is going to have his hands full. As explained by Nik De, CoinDesk’s regulatory expert, he also faces the ongoing XRP controversy, a booming (and lightly regulated) stablecoin market, and questions about whether the U.S. should launch its own central bank digital currency.
How he comes down on these topics, starting today, will have ramifications for years.