Former US SEC Chairman Jay Clayton commented on the agency’s current handling of cryptocurrencies during a conversation with Bloomberg Invest On. June 8.
Starting June 5th, the U.S. Security Council has indicted Binance and Coinbase. Bloomberg’s Carol Massall asked Mr. Clayton if he would do the same as current SEC Chairman Gary Gensler.
“Look, it’s [Gensler’s] leadership today. He has been in this position for over two years. …I’m not going to be the kind of person who throws bombs or guesses from the sidelines. “
Clayton said he supports the SEC and was known during his tenure as a “crypto hawk” who put an end to the “ICO boom.” This trend took place in his first half of 2018, when his initial coin offering (ICO) raised a record $7 billion. Around that time, Mr. Clayton declared that ICOs should be regulated as securities.
SEC “Candid Conversations”
Clayton told Bloomberg that as a new technology, blockchain is expected to reform old regulations. But in reality, early blockchain technology broke investor protection. This should not have happened, he said.
Despite past attempts to regulate the industry, Clayton said regulators are now having “very candid conversations” about blockchain and cryptocurrencies, which “requires nuance.” He pointed out that the application of blockchain in the financial system “should not be controversial.”
Clayton then voiced his support for what he called a true stablecoin, stating:
“I am very impressed with the capabilities of true … stablecoins. [stablecoin] Backed by the same things that back our bank accounts. “
He said stablecoins are a “remarkable technology” for international retail value transfer. He suggested that stablecoins are much better able to comply with KYC/AML regulations compared to paper money.
Clayton did not specify which stablecoins might qualify. Co-panelist Dan Morehead of Pantera Capital suggested that the USDC has proven its support by bouncing back from depeg after the Silicon Valley Bank collapse in March. Clayton did not dispute that point.
Clayton has otherwise voiced his support for asset tokenization, noting that other countries are also working on blockchain-based sovereign debt issuances.
Former SEC Chairman Jay Clayton said government agencies are having “candid conversations” about cryptocurrencies. First, he endorses the “true stablecoins” that have appeared on CryptoSlate.