US Authorities Turning Bullish Towards Crypto?

Comments from the SEC and Fed Chairmen each lend imagination to potentially positive attitudes towards digital currency.

Kyle Heise
October 1, 2021
Blockchain News

Top Authorities Warm Their Moods 

The crypto world received a few subtle hints from US regulators toward a bullish attitude moving forward. The Chairmans of both the Securities and Exchange Commission (SEC) and the Federal Reserve (Fed) gave remarks over the past few days, signaling a potential detente. 

The SEC Chairman spoke on Wednesday at the Financial Times’s Future of Asset Management North America conference. He continued echoing his duties to protect investors but notably reiterated his support for a future bitcoin Exchange Traded Fund (ETF). Meanwhile, Chairman Jerome Powell testified before Congress on Thursday and walked back his comments from July, which targeted the role of stablecoins and cryptocurrencies versus a digital US currency.

“I immediately realized that I had misspoken,” Powell told Representative Ted Budd (R-NC). “I have no intention to ban [cryptocurrencies], but, stablecoins are like money market funds, they’re like bank deposits, but they’re, to some extent, outside the regulatory perimeter, and it’s appropriate that they be regulated. Same activity, same regulation.” 

The comments from each Chairmen arrive during a regulatory environment that seems ripe for action. Seeing that China recently banned cryptocurrencies (again!), the United States still has an opportunity to spearhead cryptocurrency and blockchain advancements. Both Chairmen respectively believe that regulation and policy are necessary, but how much remains to be seen. 


Pressures Leading to Acquiescence?

Overall, the economic outlook appears bright. Chairman Powell was joined by Treasury Secretary Yellen on Tuesday, September 28th, and provided an optimistic outlook for the US economy in the medium term. The approach toward crypto remains one of caution, albeit the regulators could be inching toward acquiescence to meaningful growth in the crypto industry. 

Secretary Yellen and the Treasury already appeared to respond to pressure by acknowledging the IRS would use a limited working definition of the word ‘broker’ for tax reasons even if the potentially obstructive infrastructure bill passes. Chairman Gensler’s recent comments showed an inclination to be hearing it from the inside as well. 

“Earlier this year, a number of open-end mutual funds launched that invested in Chicago Mercantile Exchange (CME)-traded bitcoin futures,” Gensler said in his prepared statement. “Subsequently, we’ve started to see filings under the Investment Company Act with regard to ETFs seeking to invest in CME-traded bitcoin futures. When combined with the other federal securities laws, the ’40 Act provides significant investor protections for mutual funds and ETFs. I look forward to the staff's review of such filings.”

Reading into Gensler’s words, there’s beginning to be pressure from people around him for action on the Bitcoin futures. Several countries have seen them already, and curious US investors must be in his ear. His staff already is. And don’t forget that Congress is in the ear of Powell and Yellen. Influential people are beginning to make noise to those in power, which hopefully will lead to action. 

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Kyle Heise

Born and raised in the East Bay of California. He has studied and worked on three continents and lived in eight countries. Kyle resides in San Francisco. He holds bags mostly in Ethererum, Cake, and BSC GameFi projects.

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