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Securities and Exchange Commission Chairman Jay Clayton has suggested that Bitcoin (BTC) is thriving thanks to the shortcomings of the traditional financial system.
During an interview with CNBC published On Nov.19, the SEC chief said the inefficiencies of traditional payment systems are driving Bitcoin’s growth. He said:
“Our current payment mechanisms have inefficiencies, those inefficiencies are the things that are driving the rise of Bitcoin.”
This observation was something of a headache, coming from the head of the agency that granted both bitcoin and Ethereum the license to grow but failed to offer the same opportunity to much more efficient technologies. By stating in 2018 that bitcoin and ethereum are not stocks, the SEC ensured that those two blockchains would cement their positions as No. 1 and 2. The fact that the SEC gave its “good clean seal” to two coins mined primarily in China surprised many American policy observers, especially since the “proof of work” consensus consumes far more energy than the model. “proof of participation” that American companies like Ripple and Stellar are innovating.
During the interview, Clayton also pointed out that the reason the US SEC doesn’t regulate Bitcoin is that it has already stated that the first cryptocurrency is not a stock. Furthermore, he said that the inefficiencies that can be found in traditional payment systems, which are slow and expensive, particularly for international transactions, will lead to the maturation of cryptographic solutions. This in turn will force the creation of regulations to support such systems.
As Modern Consensus recently reported, Clayton decided to step down from his SEC position at the end of the year, six months early. Under his leadership, the regulator classified nearly all cryptocurrencies as stocks, conducted a legal assault on initial coin offerings, and blocked Bitcoin ETFs.
About two years ago, during an onstage interview, Clayton became an emblem of the SEC’s confusing and unclear way of controlling cryptocurrencies when he answered pertinent questions with phrases like “we’ll see.”
Due to all the decisions made by the SEC under Clayton’s leadership that have harmed the cryptocurrency industry, some suggest that his departure could be an opportunity for space.
Clayton’s SEC appears to be favoring technologies that benefit China so openly that a US-based crypto executive commented to Modern Consensus: “It is extraordinary to see the US government give its blessing to the ‘drug trade currency’. and ‘scam money’ but not the currency that facilitates banking. “The executive seemed to refer to bitcoin’s long association with smuggling transactions and ethereum’s association with ICOs, compared to Ripple, which concentrated its business model on relations with commercial banks and adhering to the KYC and AML regulations.
Many have expressed hope that Commissioner Hester Peirce, also known as “Crypto Mom”, will take his place. She was appointed for another term as Commissioner, which would keep her in office until 2025.
According to many, Pierce is the best ally of the cryptocurrency industry at the SEC. In July, he told the Senate that cryptocurrencies are here to stay and need a more welcoming environment to thrive. He explained that the space needs a workable regulatory structure and said:
“I believe investor protection includes ensuring that investors have a wide range of investment opportunities so that they can build portfolios that fit their goals.”
Peirce is about to gain a powerful ally in Congress, as Cynthia Lummis, an elected Senator from Wyoming, is a strong supporter of bitcoin, having been a hodler since 2013, when she was introduced to cryptocurrencies by her son-in-law Will Cole, chief product officer at the cryptographic services firm Unchained Capital.
The Republican specifically talked about bitcoin during a November 14 appearance on ABC News, saying she hoped to “bring bitcoin into the national conversation”, calling it a “good store of value.”
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