US SEC Chairman Likens Stablecoins to Poker Chips on Casino Tables

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler further emphasized his "Wild West" analogy to cryptocurrencies, saying stablecoins are old-fashioned casino gambling tools.

On Tuesday, Gensler said in an interview with "Washington Post" columnist David Ignatius that most projects in the encryption field involve securities and fall under the supervision of the US SEC, while the US Commodity Futures Trading Commission (CFTC) is more suitable for enforcement against other projects . The SEC chairman called both agencies’ authority “powerful,” but there is a gap in coverage, especially for stablecoins that “may have the attributes of an investment contract.”

“Stablecoins are now almost like poker chips in a casino,” Gensler said. “There are a lot of casinos in the Wild West, and poker chips are stablecoins on casino tables.”

Gensler hinted that both the SEC and CFTC would benefit from “help from Congress” when it comes to stablecoin regulation and enforcement. However, according to the US SEC chairman, current laws appear to be broad when it comes to dealing with modern financial instruments such as cryptocurrencies.

"I'm really concerned that we're going to keep bringing these enforcement cases, but there's going to be a problem. There's going to be a problem with lending platforms and trading platforms. And frankly, when that happens, I think a lot of people are going to get hurt."

The announcement by the chairman of the US SEC follows major US cryptocurrency exchange Coinbase announcing that it will abandon its plans to launch a crypto lending program. The SEC has previously threatened legal action against the exchange, saying it considers the project a security.

Cointelegraph reported in August that Gensler wanted to introduce cryptocurrency-related policy changes around token offerings, decentralized finance, stablecoins, custody, exchange-traded funds, and lending platforms. He has long called for crypto projects to register with the US SEC, making it clear that they should work with regulators to survive in the long run.

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