NEW YORK — U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler expressed skepticism about the likelihood of bitcoin (BTC) and other cryptocurrencies serving as widely used payment methods. He believes they will be regarded primarily as a store of value.

At a recent NYU School of Law event in Manhattan, Gensler addressed questions regarding the utility of cryptocurrencies, which were initially developed to operate independently from government oversight.

Gensler characterized the SEC as "merit neutral," asserting that the market would determine the value of any given cryptocurrency based on disclosures.

"I have taught this material at MIT, and the debates about currency date back to Plato and Aristotle. These discussions have persisted for over 3,000 years, typically resulting in a singular currency per economic state."

Translation: I have taught this material at MIT, and the debates about currency date back to Plato and Aristotle. These discussions have persisted for over 3,000 years, typically resulting in a singular currency per economic state.

Gensler referenced Gresham's law — a principle indicating that "bad money drives out good" — asserting that nations generally prefer a singular currency.

"One currency unit is desired for its function as a store of value. It represents a medium of exchange and a unit of account, supported by extensive economic networks. Therefore, it's improbable that cryptocurrencies will become mainstream currencies. Their value needs to be justified through effective usage and disclosures, similar to how investors evaluate various securities on the stock exchange."

Translation: Therefore, it's improbable that cryptocurrencies will become mainstream currencies. Their value needs to be justified through effective usage and disclosures, similar to how investors evaluate various securities on the stock exchange.

Fraudsters, Grifters, and Scams

During his discussion with Robert Jackson, Gensler defended the SEC's aggressive enforcement approach against cryptocurrency firms.

"Without regulatory oversight, how can we guarantee that all laws are honored? Human nature suggests that in finance, we often operate close to the legal boundaries. The enforcement actions are crucial to ensure compliance."

Translation: The enforcement actions are crucial to ensure compliance.

He noted that the crypto sector is plagued with "numerous fraudsters, grifters, and scams," stating: "With utmost respect, many influential figures in this domain [in 2024] are either imprisoned or awaiting extradition."

Gensler also maintained that there is no need for additional regulatory measures beyond the Howey Test established by the Supreme Court in 1940.

"Those wondering about their investment structures should consider, who is forming an engagement letter with your law firm? A centralized enterprise is typically involved in those arrangements."

Translation: A centralized enterprise is typically involved in those arrangements.

He refrained from commenting on the potential effects of the upcoming presidential election on the SEC or his own tenure if former President Trump were to reclaim office.