Gary Gensler, President Joe Biden’s decide to move the Securities and Trade Fee (SEC), advised Congress Tuesday that the “better problem” in bitcoin and cryptocurrencies is defending buyers.
“Some markets have been actually rife with fraud and scams,” Gensler advised the Senate Banking Committee in his nomination listening to.
Gensler particularly pointed to some abroad markets, however didn’t elaborate on how precisely he would use SEC authority to create these protections.
Gensler is at the moment a professor on the Massachusetts Institute of Know-how, the place he focuses on blockchain know-how and digital currencies. He previously headed the Commodity Futures Buying and selling Fee within the Obama administration, a place he was confirmed to in 2009 after a bipartisan 88 to 6 Senate vote.
In his listening to, Gensler added that bitcoin and different cryptocurrencies “have introduced new pondering to funds and monetary inclusion,” including that he may also prioritize shopper safety with regard to the custody of digital property
Different members of the Biden administration have appeared lukewarm to cryptocurrencies. Treasury Secretary Janet Yellen said last week that she didn’t really feel bitcoin is “extensively used as a transmission mechanism” and has considerations about the usage of cryptocurrencies for unlawful actions.
“To the extent it’s used I concern it’s usually for illicit finance,” Yellen mentioned at a New York Instances occasion. “It’s an especially inefficient means of conducting transactions, and the quantity of vitality that’s consumed in processing these transactions is staggering.”
Members of the Senate Banking Committee additionally questioned Gensler on the run up in GameStop stock prices, which raised questions concerning the relationship between zero-commission inventory brokerages like Robinhood and wholesale market makers that execute the trades.
Gensler advised Congress that he worries concerning the so-called “payment for order flow” construction. The nominee expressed considerations concerning the capacity of a single market maker, Citadel Securities, to handle roughly 40% of retail circulation.
“What does that do to the pricing of capital on this nation? These are necessary questions,” Gensler mentioned.
Gensler dedicated to finding out the difficulty however shied away from providing coverage suggestions on the matter.
Brian Cheung is a reporter overlaying the Fed, economics, and banking for Yahoo Finance. You’ll be able to comply with him on Twitter @bcheungz.