Gensler Warns That Private Monies “Usually Don’t Last That Long”

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  • SEC Chair Gary Gensler has warned cryptocurrency investors that “Private monies usually don’t last that long”
  • Gensler spoke to the Washington Post about the need to regulate the crypto space
  • He added that stablecoins were like the “poker chips” at the casinos of the Wild West

Securities and Exchange Commission (SEC) Chair Gary Gensler has taken aim at cryptocurrencies again, this time warning that “private monies usually don’t last that long”. In an interview with the Washington Post, Gensler referenced the scope of the cryptocurrency space and said that there was no “long-term viability for 5,000 or 6,000 private forms of money”, while comparing stablecoins to “poker chips at the casino”.

Gensler Tars All Crypto Projects With the Same Brush

Gensler was considered to be potentially pro-crypto when he took up the post of SEC chair in January, but any such beliefs have been quickly disabused with Gensler laying into the crypto space time and time again in 2021, referring to it as the “Wild West” on more than one occasion. While there are a number of charlatans and bad actors in the space, to tar them all with the same brush is reductive and does not reflect on the good work being done by legitimate projects.

Gensler damned Satoshi Nakamoto with faint praise when he said that the Bitcoin whitepaper “had some basic innovations”. Gensler did add that the fintech movement was “pushing at the side of central banks around the globe to reconsider how to provide payment systems”, but this was about as good as it got, stating that crypto exchanges, lending platforms and the like “fit the definition of security”. This was something Coinbase found to its cost recently when it was forced to pull Coinbase Lend because of the threat of a lawsuit from the SEC.

Stablecoins Come in For Particular Attention

Gensler’s headline-making news came when he pushed the Wild West analogy further:

These stable coins are acting almost like poker chips at the casino right now; so, add to the Wild West analogy. I mean, we’ve got a lot of casinos here in the Wild West and the poker chip is these stable coins, you know, at the casino gaming tables.

Some stablecoins, of course, are licensed and backed by regulators in their jurisdiction, but Gensler was keener to focus on the negatives. He summarized his points by saying that “we’ve experimented historically with private forms of money” in the time before the Federal Reserve, with the creators of each of them believing they would succeed, although “History tells us otherwise”.

Bitcoin has been around for 12 years and counting.