Yuri Gripas/Reuters
Gary Gensler, Chairman of Securities and Exchange Commission, compared stable coins to poker chips.
Gensler referred to the $2 trillion cryptocurrency market in his old analogy as the "Wild West,"
Under the direction of Treasury Secretary Yellen, the SEC is currently working on a report on stablecoins.
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In an interview with The Washington Post, Gary Gensler, Chairman of Securities and Exchange Commission, compared stable coins to poker chips. He also referred to the $2 trillion cryptocurrency market in a previous analogy as the "Wild West."
He also stated that private money has proven to be unsustainable, suggesting that thousands of such projects will not last.
Gensler stated that stablecoins are "almost like poker chips at casinos right now," in an interview with Washington Post columnist David Ignatius. "We have a lot casinos in the Wild West, and the poker chips is these stablecoins at casino gaming tables."
In a speech delivered in August, Gensler said that the digital asset market was similar to the Wild West because it lacks a strong level of protection for investors. Gensler has urged lawmakers to increase the authority of the SEC to regulate the sector.
A stablecoin can be a cryptocurrency that is tied to fiat currencies like the US dollar, and backed with traditional assets such short-dated government bonds. According to CoinMarketCap.com, USD Coin was the most valuable stable coin. It had a market capitalization close to $30 billion. Gensler didn't name any stable coins in the interview.
Gensler stated that the SEC is currently preparing a report on stable coins under the direction of Treasury Secretary Janet Yellen and added that it would be beneficial to work with Congress in regulation of stable coin.
Gensler, who last week informed the Senate banking committee about cryptocurrency exchanges needing to register with the agency as some tokens and products could be securities, published the interview.
Gensler stated to the Washington Post that these platforms should be able to register and provide investor protection remittances.
According to the regulator, there have been examples of experimentation in the US with private money forms, such as the Wildcat banking era, which ran from the 1830s through the 1860s. This was when banks created their own notes and competed against each other.
Private monies don't usually last very long. So I don't believe there is a long-term viability of private money, whether it's 5,000 or 6. He said that history has proven otherwise. "So, in the interim, I believe it's worth having an investor protection system placed around this."
