By Jim Duffy
Ordinarily, a Senate Confirmation hearing on a nominee for the Securities and Exchange Commission (SEC) is no big deal. But this week was an exception.
Maybe not the crusty old dudes, but the topics that were covered. Most notably, the fact that cryptocurrency was a prominent theme in the discussions was big news. So buckle up for the ride because it looks like we’re entering into an unprecedented time surrounding how crypto goes mainstream.
Gary Gensler, tapped to lead the Securities and Exchange Commission [SEC], is President Joe Biden’s pick and arguably a darn good one. Gensler is not a career bureaucrat with a long banking pedigree. No, he is much more. Currently, he is a professor at the Massachusetts Institute of Technology [MIT], where he teaches blockchain, blockchain technology and digital currencies.
How appropriate that this “new guy” has such a grasp of this discipline as all signs suggest that not only the United States but Europe and China are all headed in that direction.
China is already ahead of the pack with a digital Yuan. Make no mistake, this new Chinese digital currency is not just for show. It is aimed at challenging US dollar dominance in the global financial system. So Biden’s timing in his pick is spot on.
Within the narrative of cryptocurrency, installing an SEC leader who understands its potential is even more important. Now that crypto is firmly on the radar of the Senate and Congress, we can now have a grown-up discussion about where it fits.
In his hearing, Gensler pointed out that Bitcoin and other cryptocurrencies, “have brought new thinking to payments and financial inclusion.”
This speaks favorably to the credit and banking markets. Mastercard, Visa and PayPal have all expressed genuine interest in creating on-ramps and off-ramps for cryptocurrencies as well as improvement in current payment rails. This is exactly what these companies want to hear as they invest hundreds of millions of dollars into 21st Century finance.
However, there is a late get message that stands to impact ordinary Americans more. Gensler understands that “Main Street” has suffered amid the pandemic, while Wall Street has prospered. Quantitative Easing [QE] and Fed money printing has not properly made its way down to poorer Americans. Gensler has made it clear in his word that he wants to address this and understands the potential that cryptocurrency can have here.
In short, crypto can help re-shape the socio-economic landscape in the U.S. giving Hispanics, Blacks and other minority groups a better shot at becoming financially independent and better off.
At Gokhshtein, we believe in the enabling factor of crypto where wealth can be distributed in a more sovereign and equitable way across the country and the world for that matter. Gary Gensler has the “bit” between his teeth and can start to nudge this along. His overtones on ensuring that investors are protected too was a reassuring line as banks are increasingly given the powers to custody crypto for investors.
The last thing we need right now is another Bernie Madoff Ponzi scheme or “mom and pop” being regularly ripped off by scammers.
Gensler will have to convince Treasury Secretary Janet Yellen on the benefits of crypto. Ms. Yellen has not yet – gone down the rabbit hole on this. But, one step at a time eh?
This is a sound nomination, the right man at the right time, who will help usher crypto out from the shadows, and its Wild West stereotypes, making it an important agenda item on the Hill.