The cryptocurrency market at the moment has already gone through a lot. These days have been quite difficult and there is growing concern about what will happen to cryptocurrencies in the future. And as if that’s not enough, we must add to this whole situation the most recent statements by Gary Gensler, Chairman of the Securities and Exchange Commission.
Gary Gensler recently did an interview and the topic of cryptocurrencies was one of the topics discussed. On this occasion, the chairman of the SEC assured that cryptocurrencies are highly speculative assets. Therefore, they should be managed as if they were securities and not other asset classes.
Gary Gensler’s plan is to provide high security standards for investors. Remember that the United States is the country where we invest, exchange and mine the most cryptocurrencies in the world. With that in mind, it’s more than clear that a large number of American citizens are at risk if the cryptocurrency market isn’t as secure as it should be.
In the case of the United States, the issue of cryptocurrency regulation arose a little later, especially when compared with other countries that are stronger in economy, technology and legislation. And while it took longer than anyone thought, the regulation they developed may be the most appropriate, especially if they go down the path of regulation to recognize cryptocurrencies rather than ban them like China has done in the past.
Regulation will protect investors
In this scenario, at least for Gary Gensler, investors in the market are the most vulnerable and suffer the most. This applies to investors of different levels, but especially to small investors. The SEC chairman said these crypto investors are not being fairly and comprehensively covered.
For him, investors should not be considered as holders of cryptocurrencies, because it is money, a digital wallet and an exchange platform, and this is very similar to a standard transaction carried out through normal channels. Once investors are more secure, 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 have been led to believe. For him, there are a large and very large number of trading and lending sites that deal with a large volume of cryptocurrencies, which can cause price fluctuations and create changes in the status of these assets.
In addition, he pointed out that some cryptocurrency platforms constantly turn to investors only for trading, but rarely for protection. If the platforms truly supported the tokens, they wouldn’t have to worry about creating a market that would ultimately affect investors.
Stable currencies will also be regulated
And, as expected, the topic of Terra was brought up, which was the third largest stablecoin in the world and which suffered a complete collapse, resulting in millions of losses for the cryptocurrency market. Sometimes when people talk about cryptocurrencies, they tend to think a lot more about decentralized currencies due to their high volatility, but Terra has shown that regulation may be needed for this asset class as well.
In this regard, Gensler argued that stablecoins should also be regulated. He claims that stablecoins are commonly used to buy and sell other cryptocurrencies and are actually held on crypto exchanges. This means that individual investors cannot directly trade and their hands are practically tied.
In the past, Gensler has been a leading proponent of cryptocurrency regulation and has repeatedly tried to give cryptocurrencies a truly proper place. One of the biggest challenges for regulators is categorizing cryptocurrencies, and many still don’t know where to classify them, but Gensler’s idea is to give them the quality of a valuable asset, which can be quite positive for cryptocurrencies.
If cryptocurrencies begin to be considered valuable assets under the law, the laws of the country will also apply to the use of cryptocurrencies. While this probably won’t stop cryptocurrencies like bitcoin from fluctuating, it could raise security standards to prevent some illegal activity, and the acceptance of cryptocurrencies will lead to more investment and a much more profitable market in the medium to long term.
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