US House, Securities and Exchange Commission (SEC) Chairman Gary Gensler told Congress on Tuesday that his agency would not move to ban cryptocurrencies.
The topic was addressed when North Carolina Representative Ted Budd, a supporter of cryptocurrencies, asked whether the SEC would move to ban digital currencies like China’s last month. To this Gensler said:
“No, it will depend on Congress.” He continued, “I am technology-neutral. I think this technology has been a catalyst for change and can continue to be, but technologies don’t last long if they stay outside the regulatory framework.”
While Gensler has expressed concern over the crypto market, worrying that “people will be hurt,” his recent comments are in line with Federal Reserve Chairman Jerome Powell, who told members of Congress during a September 30 hearing that his “No pun intended” “Except crypto.
In China, regulators have taken the opposite approach.
On September 24, officials said that crypto was banned and that they would go after miners and digital assets. Soon after, offshore cryptocurrency exchange Huobi stopped allowing people with phone numbers linked to mainland China to register for a new account, Businesshala reported. Huobi later issued a statement saying it would “gradually terminate existing mainland China user accounts.”
Later, a combination of China’s Supreme Court, the People’s Bank of China, police and internet and securities watchdogs indicated that implementing the ban would come in several different ways. The loophole allowing Chinese citizens to invest through offshore exchanges was also closed.
That led many of the country’s crypto miners to flee China, which once accounted for 46 percent of the global hash rate, according to the Cambridge Bitcoin Electricity Consumption Index, a measure of the power used in mining and processing, according to Businesshala.
According to data collected by Statista, the United States ranks number one in bitcoin trading volume. Americans buy and sell bitcoins worth more than $1.5 billion – more than double the amount traded by the second largest country, Russia, which buys and sells $421 million worth of cryptocurrencies.
As more businesses continue to accept cryptocurrencies, where they stand within the global digital economy is expected to become an sometimes pressing question for regulators.
“What we want to do is provide some basic protection against fraud and manipulation,” Gensler said in an interview with CNBC. “The trading platform they are on is not currently under a regulatory regime that protects them like they are trading on the New York Stock Exchange.”