US SEC Chairman: SEC has no plans to ban encryption, whether to ban encryption will depend on Congress

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler told Congress on Tuesday that the SEC has no plans to ban crypto.

When asked by Congressional Blockchain Caucus member and longtime crypto supporter Rep. Ted Budd of North Carolina whether the SEC has plans to follow China’s lead in banning cryptocurrencies in favor of a future central bank digital currency (CBDC), Gensler said, “No, that’s going to be up to Congress.”

Gensler’s assertion that the SEC does not intend to ban cryptocurrencies is similar to comments made by Federal Reserve Chairman Jerome Powell last week, when he told the House Financial Services Committee that the Fed has “no plans to ban” the $2.2 trillion asset class.

Congress has questioned the SEC’s efforts to regulate cryptocurrencies, and the debate over how to regulate the industry and its various parts, including exchanges and stablecoins, has intensified.

During Tuesday’s four-hour hearing, Gensler answered questions about cryptocurrencies, stablecoins, exchange regulation and decentralized finance (DeFi).

Gensler largely reiterated his previous views on cryptocurrency regulation, including the need for exchanges to “come in and register with the SEC,” the potential systemic risks posed by stablecoins and the need for them to be more strictly regulated, and that “most” cryptocurrencies fall under the definition of securities.

However, Gensler also expanded on his understanding of the SEC’s power to regulate the crypto industry.

When asked by Rep. Jim Himes (D-Conn.) for “guidance” on the topic of crypto regulation, Gensler reiterated his previous position that crypto exchanges need to register with the SEC but added that decentralized exchanges (DEXs) will also be regulated.

Gensler also expanded on his stance on stablecoins, which he previously referred to as “poker chips” at the crypto “casino.” Gensler doubled down on his poker chip analogy in response to several questions, adding that he believes stablecoins are a systemic risk to the economy.

“The $125 billion of stablecoins that we have right now are like poker chips in a casino,” Genser said. “I do think if this continues to grow, and it grew about 10 times last year, it could create those systemic broad risks.”

The price of Bitcoin, which was already rising on the day, seemed to surge further on Gensler’s comments, rising to a high of $51,678.20. Bitcoin is up 4.59% in the past 24 hours.