- Telecommunications Giant Vodafone Leaves the Libra Association
- Group of Central Banks Assesses Developing Central Bank Digital Currencies
- South Korea Might Impose 20 Percent Tax on Cryptocurrency Profits
- Report: Terrorists Increasingly Use Crypto to Raise Funds Anonymously
- Canadian Securities Administrators Subject Crypto Exchanges to Securities Laws
And the saga of crypto classification and regulation continues… this time with the input and observations of Gary Gensler, who was the chairman of the Commodity Futures Trading Commission (CFTC) from 2009 to 2014.
In an interview with Bloomberg, Gensler discussed cryptocurrency, blockchain and regulations while releasing some very interesting statements.
First, Gensler praised blockchain technology and professed that it “has a real chance to be a catalyst for a change in the world of finance, because it moves data and it also applies computer code across a decentralized network.” Furthermore, Gensler agreed that there’s a need to make the distinction between cryptocurrency and blockchain, which requires less – if at all – regulations while law enforcement agencies should be “technology-neutral.”
That said, he went on to also claim that currently blockchain “is more hype than reality” and the technology is still 3 or even 5-10 years away from “really being able to be scaled.” Gensler then made the comparison with Visa, which can process 25,000 transaction per second, whilst Bitcoin can only process 7-10; yet, he affirmed that he is an optimistic and believes that “the scaling issues will come.”
With regard to initial coin offerings (ICOs), Gensler maintained that “if it quacks like a duck, and waddles like a duck, it’s a duck” – asserting that ICOs are essentially like initial public offerings (IPOs), and thus indirectly insinuating that ICOs should be considered as securities and be regulated accordingly. In fact, this is a similar approach to how the SEC has recently begun to increasingly adopt.
Finally, Gensler openly discussed regulation – probably the most fascinating issue for many crypto enthusiasts and investors.
You want some form of regulation. You want traffic lights and speed limits, because then the public is confident to drive on the roads, in this case the crypto roads. And so I think the two can co-exist, but it will take a number of years to sort through and get the balance right.
Although it is quite a lax attitude, it is a little more stiff than the one of the current CFTC Chairman Christopher Giancarlo, who attested in a Congressional hearing in July that heavy crypto regulation isn’t necessary yet and even later affirmed that Bitcoin could solve some of the world’s problems. All in all, it does seem that the top regulators do understand that over-regulation could be devastating to the crypto industry.