Marc Powers who teaches “Blockchain, Crypto and Regulatory Considerations” and “Fintech Law” as an adjunct professor at Florida International University College of Law, has described U.S. Securities and Exchange Chairman Garry Gensler as “not only a powerful voice in the debate around blockchain use cases and regulatory considerations but also a dangerous one.”
This, according to Powers, is because Garry Gensler’s knowledge and experience make him a double-edged sword in the crypto industry. Having worked both in and out of the U.S. government and also learned and taught blockchain courses at the Massachusetts Institute of Technology (MIT), Gensler is believed to have both the political muscle as well as the intellect to—along with Federal Reserve Chair William Powell and Treasury Secretary Janet Yellen—hurt the advancement and adoption of the technology in the U.S. In Powers’s words as stated in his piece on Cointelegraph:
“As I have said or suggested in prior columns, this is a two-edged sword. On the one hand, it is good to have someone in government who understands the technology and its beneficial use cases. On the other hand, his smarts can be used to find ways to serve the interests and politics of the Biden Administration, which with Federal Reserve Chair William Powell and Treasury Secretary Janet Yellen decidedly antagonistic to cryptocurrencies, the three of them can implement rules and policies that could harm the technology’s advancement and adoption.”
But Powers does not think that the U.S. SEC, U.S. Federal Reserve, and the U.S. Treasury combined have the power to stop the crypto adoption. It is too late, in Powers’s opinion:
“That’s right, let me say it again: It is too late. One country can not kill it by banning its use and activities, nor can one country regulate its use by world citizens in an effort to control BTC and its citizens. Bitcoin is now a world currency that is owned and controlled by no country nor group of currencies. It is owned by the world’s citizens.”
Powers pointed out how crypto had become insulated against state resistance, using China, South Korea, and India as illustrations. China’s repeated banning of crypto activities and recently crypto mining and trading has not resulted in the demise of BTC but instead effectively had the mining industry relocating to Eastern Europe and the United States. Dozens of crypto exchanges in South Korea have not complied with the registration requirements of the country. And India now ranks number 2 in global crypto adoption after the Supreme Court of India reversed the ban by the Reserve Bank of India.
Powers also disagreed with Gensler’s characterization of bitcoin as “private” currency when Gensler said recently that private currencies do not last or always eventually failed historically. According to Powers:
“I take issue with the SEC’s Chair’s history lesson when he says private currencies do not last, implying the same will be true for BTC. I don’t agree with his characterization. I don’t see BTC as a “private” currency. To the contrary, it is a world currency, very public and available to anyone with a smartphone or a computer. It is not created by a private or permissioned blockchain, but rather on a permissionless one.”
Powers, who in his legal career has formerly worked in the U.S. SEC’s Enforcement Division, also disagreed with one of Gensler’s arguments that bitcoin is not backed by anything, and thereby portends risks. Powers reminds Gensler that since 1971 when the U.S. abandoned the gold standard for the current fiat system, the U.S. dollar is no longer backed by gold.
Pointing out that “crypto is inevitable”, Powers emphasized what he has been saying since 2017 about the global financial system and economy running a dual system:
“I believe we will, in time, have a dual financial system and economy. There will be a crypto world economy and a parallel fiat digital currency in the form of central banks digital currencies, or CBDCs, like what Powell is working on at the Federal Reserve and what China has already rolled out to its citizens in major cities, called the digital yuan.”
Powers is neither the first nor only person who has expressed displeasure with the U.S. SEC’s approach to crypto regulation. Recently, U.S. SEC Commissioner Hester Peirce similarly expressed how bewildered and shamed she feels about the U.S. SEC’s regulatory approach in the digital-assets industry.
Will regulators introduce rules and policies that will make the current growth in global crypto adoption safer or will regulators continue to take actions that impede crypto adoption under the claim that it is for consumer protection and investor safety?