Former Securities Exchange Commission (SEC) chair Jay Clayton has acknowledged that getting a consensus for crypto regulation in the United States appears elusive for involved parties but challenged the government to take the first step.
Clayton noted that amid the controversy, the government should first embrace the benefits of cryptocurrencies to the financial system before enacting any regulation, he said in an opinion piece published by the Wall Street Journal on August 25.
He cited benefits such as the ability to power quick payments alongside custody of assets digitally and called on the SEC to provide guidelines for the custody of tokenized assets.
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“To move forward, the U.S. needs, first, to embrace the efficiencies provided by tokenizing such well-understood services as payments and custody of assets in digital form. The presidential working group, led by the Treasury, should move forward on stablecoin rules, identifying the characteristics that make stablecoins a means of payment (akin to money transfer) and not a security or commodity,” Clayton said.
Regulation concerns by crypto players
According to the former chair, there is fear among crypto players that regulations will likely result in losses for investors or missed opportunities.
His recommendations come as the SEC, and current chair Gary Gensler has received criticism for the alleged stifling of crypto sector development. In this line, crypto proponents are pushing for the resignation of Gensler through an online petition.
One criticism around the SEC has been on cracking down on crypto despite a lack of clear regulations to follow. However, according to Clayton, once the regulator unveils guidelines for tokenized assets, the government ‘must go after those who are defying its laws.’
“Starting there, we will soon know more. The opposing camps will have little to challenge, and the next step will be easier,” he added.
U.S. readiness to regulate crypto
Additionally, Clayton stated that the controversy regarding regulations of assets like Bitcoin (BTC) is due to the global growth of cryptocurrencies. In this case, the former top regulator noted that the U.S. has no readily available requirements on licensing, mandatory disclosures, and marketwide secondary-trading rules.
Interestingly, in a previous op-ed with the Wall Street Journal, Gensler reiterated that securities laws still apply to new technologies like cryptocurrencies.