SEC Chair Gary Gensler on Crypto: ‘It’s Unlikely These Assets Will Become Currency’
NEW YORK, NY – Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), recently expressed skepticism about the future of Bitcoin and other cryptocurrencies as mainstream forms of payment. During a talk at NYU School of Law, Gensler shared his belief that these digital assets are more likely to remain a store of value rather than evolve into widely accepted currencies.
Responding to an attendee's question regarding the utility of cryptocurrencies in a fully regulated environment, Gensler emphasized the agency's neutral stance on merit, leaving it up to the public to decide—through appropriate disclosures—whether a particular crypto asset holds any utility.
Reflecting on his teaching experience at MIT, Gensler delved into historical context, noting, "These discussions date back thousands of years to the philosophies of Plato and Aristotle. Throughout history, we’ve generally seen one currency per nation-state, and there’s a reason for that." He referenced Gresham's law, which suggests that “bad money drives out good,” implying that countries typically prefer a singular currency due to its efficiency as a store of value, medium of exchange, and unit of account.
"It’s improbable that these digital assets will become currencies," Gensler remarked, adding that they would need to demonstrate their value through utility and disclosures, much like investors choose among securities listed on stock exchanges.
In a conversation with NYU Law Professor Robert Jackson, Gensler also defended the SEC's strong stance on enforcing crypto regulations. He posed a rhetorical question, "Without proper oversight, will laws be followed?" He pointed out that in finance, individuals often push boundaries, and enforcement actions are necessary to guide them back on track.
Gensler didn’t mince words when addressing the current state of the crypto industry, calling out "a lot of fraudsters, grifters, and scams." He noted that several key figures in the sector are either imprisoned or facing extradition.
He reiterated his belief that no new regulatory frameworks are needed beyond the well-established Howey Test, created by the Supreme Court in 1940. "If you're questioning whether something is an investment contract, just ask yourself—who is signing the contract with the law firm? Who is contacting the broker-dealer to make a market for your asset? The presence of a central enterprise is often undeniable."
Gensler chose not to comment on how the upcoming presidential election might influence the SEC’s operations, nor did he speculate on his future role if former President Trump were to regain office.
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