- Joe Biden has reportedly named Gary Gensler a cryptocurrency and Bitcoin expert to lead the financial policy transition team.
- Gensler said in 2018 that there is a “strong reason” for Ripple (XRP) as a title.
Much like the final election results in the United States, it is also questionable how an upcoming Joe Biden presidency will affect the cryptocurrency industry. However, the appointment of Gary Gensler as head of the financial policy transition team could indicate the direction the Biden administration is heading. As Coindesk reports, Gensler was confirmed yesterday by Joe Biden at the head of the audit team at the Federal Reserve and the banking and securities regulators.
How Gensler Could Affect the Bitcoin and Cryptocurrency Market
Gensler is deeply rooted in political America and served as president of the Commodity Futures Trading Commission (CFTC) under Barack Obama. During the Clinton administration, Gensler also served in the treasury department. The former Goldman Sachs banker has also testified before the US Congress about cryptocurrencies and blockchain on multiple occasions, making his stance on the crypto sector very clear in the past.
Also of interest to the crypto space is his recent appointment at MIT, where he is Professor of Blockchain, Digital Currency, Financial Technology, and Public Policy at the Business School and Senior Advisor to the MIT Media Lab’s influential Digital Currency Initiative.
Beyond that, Gensler released his first notable public statement related to cryptocurrencies in April 2018 at a conference for MIT in which he criticized the lack of an Initial Coin Offerings (ICO) framework and explained:
More than $ 10 billion was raised through ICO, a blockchain-based fundraising method. But a significant portion of these are fraudulent, and many were launched in a way that did not comply with U.S. securities laws established in the 1930s.
Gensler also warned that the United States “is not in great shape at the moment”. Gensler commented on his so-called “blockchain duck test” to determine if a blockchain token is a security by saying, “when you cackle like a duck, when you swim like a duck, I think the bird is a duck.”
Gensler also determined that there was a “strong argument” for the XRP cryptocurrency held by Ripple in escrow accounts to be a security. He also said the same about Ethereum. Additionally, Gensler also wrote a detailed report to Congress on overseeing new assets in the digital age.
He said that Bitcoin and cryptocurrencies “have led to healthy debates within the central and economic banking communities about the pros and cons of central banks issuing retail central bank digital currencies (CBDCs) and, if so, the effects that could have on payment systems and the commercial banking system “. At the same time, Gensler also warned against the fraud that Bitcoin entails.
Gensler’s comments during the House of Representatives Finance Committee hearing on Facebook Libra also attracted attention. In his speech, the former CFTC president reiterated his “duck test” to determine if a token is a stock. If not, he also warned of the many risks posed by Libra and called the project a serious threat to the financial system.