SEC Chair Says Stablecoins are Like Casino Poker Chips

The US Securities Exchange Commission (SEC) chair, Gary Gensler, has compared stablecoins to poker chips in a casino. He made this statement in an interview with Washington Post columnist David Ignatius. According to him, “We’ve got a lot of casinos here in the Wild West, and the poker chip is these stablecoins at the casino gaming tables,”

This isn’t the first time he will be making a Wild West analogy when describing the cryptocurrency sector. In fact, the SEC chair’s view of the sector is that of a Wild West in need of regulations. In describing stablecoins as casino poker chips, he considers them to be gambling instruments.

In the interview, Gensler claimed that most crypto projects deal with securities and thus, should be brought under the SEC regulatory authority while the Commodity Futures Trading Commission (CFTC) has better regulatory jurisdiction over others. He continued that though both the SEC and CFTC have broad regulatory authorities, there are still some lapses especially when it comes to stablecoins.

Gensler Wants Congress to Regulate Stablecoins

He went further to hint at the need for Congress’s help to regulate stablecoins and enforce the rules made. The SEC chair claimed that the current laws are too broad to regulate a modern financial instrument such as crypto. Gensler believes that a crypto-focused law will make enforcement easier without harming anyone or causing problems for trading and lending platforms.

Gensler’s statement comes at the back of Coinbase’s recent announcement that it’s shelving its stablecoins lending program plan. The crypto exchange had revealed that the SEC had threatened to sue it if it continued the product because it considered it to be a security.

The SEC chair who was appointed in April has fallen short of the expectations of most people in the crypto community so far. As a cryptocurrency and blockchain expert, many expected his appointment to bring regulatory clarity to the sector. But this is yet to happen months into his tenure. Instead, he has further complicated the rules for the industry with some insiders like Coinbase’s Brian Armstrong accusing the commission of sketchy behaviour.

However, there are reports that the SEC could introduce new regulations to the crypto sector soon. Gensler himself has encouraged crypto projects to register with the commission, claiming that working with regulators will ensure their long-term growth and survival.