Regulation
Gary Gensler on crypto regulation: balancing innovation and compliance
On June 25, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), spoke with Bloomberg’s Annmarie Horden at the Bloomberg Invest Summit. During the conversation, Gensler discussed the intersection of cryptocurrency and securities laws, the policy implications of cryptocurrency regulation, and his current priorities at the SEC.
Crypto Securities and SEC Regulations
Gensler emphasized that there is no inconsistency between crypto securities and existing securities laws. He stressed that the rules governing securities are clear and have been established to protect investors and ensure fair, orderly and efficient markets. Despite this, he acknowledged that a significant number of entities in the crypto space do not comply with these laws. This non-compliance is a critical issue that the SEC aims to address through its regulatory oversight.
Crypto political landscape and regulation
The discussion highlighted the growing political importance of cryptocurrency, with former President Trump planning to address a major conference on Bitcoin and vowing to end what he calls “Joe’s War Biden against crypto”. Mark Cuban also suggested that Gensler’s actions could potentially impact the upcoming election. In response, Gensler refrained from commenting on political issues, reiterating that he was focused solely on his role as a securities regulator.
Gensler said its primary responsibility is to protect investors and supervise issuers, ensuring access to fair, orderly and efficient markets. He said other individuals might engage in political speech, but his mandate is to maintain the integrity of financial markets.
SEC Current Initiatives and Future Plans
Gensler shared his sense of privilege as SEC chairman and his commitment to advancing the agency’s mission. He highlighted several key initiatives that the SEC has been working on, including:
- Transition to the T+1 settlement cycle: The SEC has implemented a significant transition to a one-day clearing and settlement cycle, which aims to reduce risk and improve market efficiency.
- Treasury Clearing Rules: Gensler stressed the importance of stabilizing the $7 trillion Treasury market, which has experienced periodic fragility. The implementation of new cash clearing rules is a priority to ensure market robustness.
- Rule proposals in progress: The SEC has proposed several rules that have yet to be adopted. Gensler noted that while there is no rush to finalize these rules before the election, the goal is to improve markets for the benefit of the American public.
Gensler concluded by stating that serving the American people and protecting investors is his primary goal. Whether he stays in office until his term ends in 2026 or leaves sooner, he views his role as a public service and a cornerstone of democracy in action.