Gary Gensler has been nominated as chair of the Securities and Exchange Commission and his expertise in fintech and digital currency could lead to new regulatory approvals such as a Bitcoin exchange-traded fund.
Gensler is a professor of the practice of Global Economics and Management at MIT Sloan School of Management and co-director of MIT’s Fintech@CSAIL, which collaborates with industry and also senior advisor to the MIT digital currency initiative, researching artificial intelligence, blockchain technology, and new financial technologies.
Google searches for “Gary Gensler Bitcoin” jumped after his appointment was confirmed:
MachinaTrader, part of Swiss fintech MachinaWare, said in a blog that Gensler has supported cryptocurrencies, including telling Congress that Bitcoin was a “modern form of gold.”
“He also believes that Diem (formally Libra) meets the requirements for being classified as a security,” added MachinaTrader. “However, Gensler is also aware that the asset class is rife with vulnerabilities, scams, and manipulation.”
Jake Chervinsky, co-chair of the decentralized finance (DeFi) group at the Blockchain Association, said the SEC could approve a bitcoin exchange-traded fund:
In Switzerland CoinShares today became the second issuer to announce the launch of a Bitcoin exchange-traded product on the Swiss Stock Exchange this year. The product allows investors to gain bitcoin exposure on a regulated European stock exchange. The bitcoins are held in custody by Komainu, a regulated institutional-grade digital asset custodian.
Christian Reuss, head of SIX Swiss Exchange, Markets at SIX, said in a statement: “Interest in Bitcoin continues to grow. As the world’s leading regulated marketplace for products with crypto-currency underlyings, SIX offers investors crucial benefits like transparency, liquidity and equal treatment.”
The new product means there are 22 Bitcoin ETPs and structured products on the Swiss Stock Exchange from seven issuers, following the addition of ETC Group on 13 January 2021.
The exchange said its trading turnover in crypto products was Chf 381m ($429m) in the first two weeks of this year, more than during any whole month since crypto products were first admitted in 2016.
Coinerro highlighted the transcript of a 2018 speech that Gensler gave at an MIT Technology Review Business of Blockchain event:
Gensler was also chairman of the U.S. Commodity Futures Trading Commission between 2009 and 2014 leading the Obama-Biden Administration’s reform of the $400 trillion over-the-counter swaps market under the Dodd-Frank Act.
Elizabeth Warren, the US Senator for Massachusetts, welcomed Gensler’s appointment:
Better Markets, an independent, non-partisan non-profit group that comments on financial regulation, also said Gensler was an outstanding choice.
Dennis Kelleher, president and chief executive of Better Markets, said: “Based on years of working closely with Gary at the CFTC, when he fought valiantly and relentlessly to enact the Dodd-Frank financial reform law, we know Gary will fulfill the SEC’s mission to prioritize investor protection, promote U.S. capital markets and facilitate capital formation for the productive economy. In stark contrast to the prior chairman, Gary will actually look out for Mr. and Mrs. 401k and Main Street investors, not use them as PR cover for an anti-investor agenda.”
In contrast the Competitive Enterprise Institute, which advocates for less regulation, said that if Gensler is confirmed he should focus on the core functions of the SEC and look for opportunities to lift outdated regulations.
Richard Morrison, CEI Research Fellow, said: “I urge Mr. Gensler to focus on the Commission’s core mission of protecting investors and facilitating capital formation, not on divisive initiatives like forcing companies to report on whether they’ve supported a laundry list of political causes. Former Chairman Jay Clayton noted a ‘growing drumbeat’ for the Commission to impose reporting standards on environmental, social, and governance (ESG) topics; but that would be a mistake.”
John Berlau, CEI senior fellow, said: “I will likely disagree with much of the agenda he would pursue at the SEC. But my hope is that should he be confirmed, Gensler would work with the SEC commissioners of both parties to lift some outdated regulatory barriers to allow fintech to greatly broaden access to capital for entrepreneurs, and financial inclusion for middle-class savers and investors.”