China’s decision to ban cryptocurrencies had an adverse effect on the cryptocurrency market. Nonetheless, FUD caused by China has now been alleviated. Gary Gensler, Chair of the US Securities and Exchange Commission, has recently stated that the US is not going to ban cryptocurrencies.
Katie Haun, partner at Andreessen Horowitz pointed out that if the US would choose the same approach as China, it could aggravate the US economy. Instead, the US should consider China’s decision as an opportunity.
Jerome Powell, Chair at the Federal Reserve, also stated that the central bank is not planning to ban cryptocurrencies.
At the same committee, congresswoman Maxine Waters raised an area of concern by stating that the SEC has had its difficulties in the past because of digital assets with extremely high volatility such as cryptocurrencies. Another area of concern could be the medium that cryptocurrencies provide for money laundering.
Gary Gensler then responded to the questions that arose in the committee by stating that it all depends on how the US approaches the cryptocurrency field, where a balance between investor consumer protection and bank regulators should be achieved.
But that has not been exactly the case with SEC, whose actions against Coinbase exchange, Ripple, and other entities have adversely affected consumers (HODLers) as well since billions of dollars worth of cryptocurrencies were at stake.
The question that followed then came from James Himes, who asked Gensler how exactly the US can achieve that. Gensler simply restated his stance. The latter suggested that every digital asset should be registered with the SEC. Furthermore, Decentralized Exchanges (DEXs) should also be faced with regulations if the above-mentioned balance should be achieved.
Lastly, Gensler also raised awareness on stablecoins, which to him are like Poker Chips in a casino. With billions of dollars worth of stablecoins in the crypto market, he suggests that that can bring instability in the market, and problems for both SEC and the market could arise.
Nonetheless, the news that the US does not plan to ban cryptocurrencies could be one of the most bullish news so far this year, and the FUD caused by China may diminish. The 4th quarter of this year could prove to be one of the biggest so far, especially after news like this.
Also read: Chinese Crypto Users Should Move Their Funds to Other Platforms Before December, Says KuCoin