This week, reports emerged that Gary Gensler, the former chairman of the Commodity Future Trading Commission (CFTC) is set to be President-elect Joe Biden’s choice to take over the Securities and Exchange Commission (SEC). This is good news for the digital assets industry. From my experience with Gensler, whether the subject is digital assets, swaps or market structure, I can attest that he is thoughtful and broad-minded about the future of crypto-assets and that he understands the role enlightened regulators can play in boosting innovation. I can also promise he will not simply be a cheerleader.
Jeff Bandman is Founder and Principal of Bandman Advisors and a former senior CFTC official.
First of all, he gets it. He has clearly devoted himself immersively to understanding the space on many levels – technology, policy, economics and otherwise. He has testified on digital currencies policy and regulation before Congress, taught blockchain and digital currencies at MIT Sloan School of Management, and participated in numerous public and private discussions in the U.S. and internationally (some of which I’ve participated in and had exchange of views). He will step into the job shovel-ready, as well-informed and engaged with digital assets as one could possibly hope for the chair of a U.S. financial regulator to be.
I think it is highly likely that he will make market structure a high priority. Unlike previous SEC chairs, who had enforcement or M&A backgrounds, Gensler’s background is in markets and financial technology as well as policy.
Arriving at the CFTC in 2009 following the financial crisis, he led major reform of the over-the-counter (OTC) derivatives market under the 2009 G20 Pittsburgh accord, and he helped draft the Dodd-Frank Wall Street Reform and Consumer Protection Act, which reorganized the financial system. The CFTC passed over 65 rules in response to its Dodd-Frank mandate.
The industry was not always happy with the outcomes, to put it mildly. There were plenty of complaints that the CFTC’s reforms would irreparably harm the swaps market.
However, the U.S. swaps market remains broadly speaking vibrant, liquid and trusted, and performed with efficiency and resilience even in March 2020, at the height of the COVID-19 pandemic. This will reinforce his conviction that investors and other stakeholders trust well-regulated markets.
See also: Gary Gensler – Even if a Thousand Projects Don’t Make It, Blockchain Is Still a Change Catalyst (2019)
Gensler was mindful of the hold enjoyed by swaps market incumbents, and sought to enable challengers and insurgents (within a strong regulatory framework). In crypto, the “incumbents” are a largely different population, but these dynamics could be repeated.
Gensler will have strong mandates and expectations from the progressive side of the aisle . Accordingly, we can expect strong focus on investor protection to balance out promotion of capital formation using crypto-assets, and a need to ensure crypto does not become a side-door or back-door to circumvent regulatory frameworks.
I expect we will see much greater clarity on market structure and infrastructure for crypto assets – the regulatory clarity that will promote adoption and investor confidence – and I would be shocked if there are not things that make the industry howl.
Under Gensler, I think we will see the SEC green-light retail bitcoin exchange-traded funds (ETF) finally. I anticipate he will review closely, and be persuaded by, data regarding the underlying liquidity of the spot market and the integrity of selected source marketplaces where price discovery and formation are occurring.
The outlook could evolve from “I don’t want anything bad to happen on my watch” to “how can these be offered safely to American investors”? Oversight of the underlying spot market could involve a greater role for the SEC as well .
The role of the Strategic Hub for Innovation and Financial Technology (or FinHub) could also be enhanced. This office, overseen by Valerie A. Szczepanik, was recently elevated to report directly to the SEC Chair (thus aligning it with LabCFTC’s 2019 elevation). Chair Gensler may use FinHub not just for engagement but to drive stronger convergence of development and execution of policy across internal silos.
How will things play out internationally?
During Chair Gensler’s CFTC tenure (ending in 2014), relationships with other national regulators were strained, to put it mildly. International regulators with long memories have already asked me about this, worried that Gensler tried to impose the U.S. approach to swaps on other jurisdictions, and that we might expect more of the same.
I don’t think international conflict will be a hallmark of his approach to crypto regulation. I believe we can expect strong international collaboration and cooperation. Crypto-assets regulation is very different than the international swaps market.
First of all, the Biden Administration is widely expected to embrace multilateralism with regard to international policy and engagement. For the SEC Chair to take a different approach would strike a markedly different tone.
Second, the CFTC under Chair Gensler’s leadership was either the first jurisdiction, or among the first jurisdictions, to adopt OTC reforms after the financial crisis. Much of the international friction arose because the U.S. went first, and CFTC rules, guidance and interpretations were given extraterritorial effect to fill a vacuum and deter regulatory arbitrage. Recent CFTC rule-makings on cross-border issues have referred to changed circumstances now that other G20 and non-G20 jurisdictions have largely (though not completely) implemented the 2009 Pittsburgh reforms (the SEC being among the last to do so, having completed its framework for security-based swaps trading just last month).
The global landscape of crypto-assets regulation in 2021 is far different from OTC swaps circa 2011. Although there is not a one-size-fits-all approach by any means, many jurisdictions have implemented rigorous and innovative crypto-assets regulatory frameworks already. Others, such as the EU, have comprehensive proposals under consideration.
I expect we will see much greater clarity on market structure and infrastructure for crypto assets.
Moreover, there are numerous international workstreams under the aegis of the FSB, BIS, FATF, G7, G20, OECD, IMF, CPMI, IOSCO and others. Although gaps and differences remain, as does potential for regulatory arbitrage in the global digital finance landscape, Chair Gensler will not encounter the regulatory vacuum he found in swaps. That said, we should not expect the SEC to be reticent to promote its perspective on international regulatory framework, or to be reluctant to advocate greater harmonization.
Nor does he have a clear statutory mandate for action with regard to crypto-assets from Congress that he did under Dodd-Frank because Congress has not adopted any crypto-assets legislation. In the absence of legislation or other oversight, he may well have considerable latitude.
Here’s a major unanswered question. Will Gensler seek, and obtain, a mandate from Congress for the SEC to regulate and supervise the spot (or cash) market for crypto-assets that are not securities, and to oversee the markets that offer trading?
Currently there is no U.S. federal regulator that supervises trading of crypto-assets like bitcoin and Ethereum that have been deemed not to be securities. The CFTC has enforcement authority. For example, if there is fraud or manipulation in the spot market that causes distortions (or worse) in the derivatives markets that it does directly regulate. But that is not the same as regulatory or supervisory authority.
FinCEN, at the Treasury Department, has authority from an AML/BSA perspective, but again these do not equate to supervision for market integrity, business conduct and safety and soundness. The SEC and CFTC do that for their respective regulated exchanges and other markets. This leaves a major regulatory gap in the US federal framework.
Will Gensler seek this type of authority from Congress? Will Congress grant it and provide the necessary resources? Will that be the “price of admission” for retail bitcoin ETFs? If this happens, it won’t be overnight.
Having shaped the structure of the global swaps market, Gensler will likely embrace the opportunity to drive the regulatory structure of the crypto-assets market.
Of course, an SEC Chair cannot act unilaterally. He will need votes from his fellow Commissioners and support from other stakeholders to execute his vision or agenda. Non-crypto priorities may take precedence, starting with the pandemic as well as other policy initiatives of the new administration that will demand resources and attention. That said, Gensler has demonstrated his ability to drive an independent agency to execute on multiple fronts simultaneously.
Like everything else in crypto, this should be interesting, unpredictable and full of twists and turns. The regulatory certainty the industry gets may not be the exact flavor it seeks.
All Eyes on Ethereum
One Ether now costs more than US$3000. Did you ever think you’d see the day?
You gotta hand it to the crypto markets: in some ways they’re comically predictable. A month ago, Ethereum was everyone’s favourite whipping boy, a bloated, expensive under-achiever that couldn’t even double its 2017 all-time high. Lol what a weakling.
And with competitors like Cosmos, Solana, Polygon and Polkadot nipping at its heels, perhaps this was the beginning of the end for the network that gave us smart contracts, ICOs, ERC-20 tokens, DeFi, yield farming, NFTs and, to be honest, the entire idea that blockchain was a multi-functional and era-shaping technological breakthrough that you ignored at your peril.
How things have changed. On Monday Ethereum blasted through the US$3000 mark like it was barely there, throwing on an extra 15% while it was at it. The network is now worth a shade under US$400 billion, putting it on par with Mastercard and Walmart, and officially making Vitalik Buterin, the 27-year-old prodigy who created Ethereum, a bona fide billionaire. So, is this how the Flippening begins?
Network to net worth
Due to the speed with which things move in crypto, we tend to underestimate some of the metrics that actually speak to a technology’s success. The new shiny thing is almost always more exciting than some dusty old contraption built in the positively prehistoric year of 2015. Did they even have electricity back then?
But Ethereum stands out from almost all other blockchains in that it’s already being used, at scale, by millions of people and companies. While that may seem like Business 101 – get more customers, be more successful – when it comes to blockchain usage is a particularly powerful factor because of the way it harnesses network effects to improve the value of the system itself. Use it more and the whole system becomes more valuable, both financially and practically, for the network’s users, miners, stakers, investors and developers. Oh, and Vitalik, of course.
How far we’ve come
Ethereum’s issue has always been its inability to scale. If you can’t handle hundreds or even thousands of transactions a second, then you’re not really fit for purpose as a global computer. The result for Ethereum has been a year of increasing network congestion and brutally high transaction fees. Yet the fact that so much continues to be built and transacted on Ethereum tells you exactly how strong these network effects already are.
There’s also an increasing focus on three major changes to the Ethereum network due to arrive before the end of the year:
- EIP-1559: Lifts one of DeFi’s major innovations in the field of ‘tokenomics’ by implementing a token burn system on every transaction. You use the Ethereum network, you burn some ETH, never to be seen again.
- Optimism: due for a full launch in July, the Optimism sidechain should significantly improve the speed of Ethereum by leveraging largely incomprehensible processes such as ZK-Rollups and Sharding. It’s already being used by the Synthetix protocol, where it has saved users over $10 million dollars in transaction fees.
- Ethereum 2.0: This is the big one, Ethereum’s transition from Proof-of-Work to Proof-of-Stake. It’s been coming for years, but the importance of the change cannot be overstated. Already more than 4 million Ethereum are being staked on the Ethereum 2.0 contract, offering an insight into how much ETH might fall out of circulation once the entire thing goes live (potentially in November).
In short, Ethereum is just getting started. The price might seem gaspingly high right now, but remember that Ethereum isn’t trying to be Walmart or Mastercard. It wants to be the thing that Walmart and Mastercard are built on – and that’s a prospect worth having a stake in.
CARBON: A perfect avenue for showcasing talent
Creative professionals sometimes find themselves figuring out where to showcase their creations and profit from them.
It’s a tough situation to be in. But with CARBON, the dilemma is lessened.
CARBON creates an avenue that gives creators both a place to show off their talents and a chance to earn money.
CARBON features an ecosystem of a global scale that integrates open finance, fashion, art, music, and non-fungible tokens (NFTs).
One of its objectives is to enable a community that can inspire, support, and reward professionals.
What the CARBON marketplace looks like
As what an ideal marketplace should be, CARBON has a lot to offer, helping emerging brands and artists have a shot even at the highest levels of competition they have to deal with.
Items related to fashion, art pieces, music, and digital assets such as NFTs are offered in the CARBON marketplace. A dedicated team will carefully select these products.
The market will also see exclusive collaborations featuring various artists and brands for physical commodities and digital items that will be dropped on a weekly basis.
As for its audience, they should prepare for a diverse experience brought by a market evolving into a global ecosystem.
CARBON was founded by Chad Pickard who also acts as its Chief Executive Officer (CEO). It is an open finance wallet and super ecosystem that is built for the whole world of fashion, art, music, and culture while also integrating digital assets through NFT offerings.
It has its native token, the $GEMS, and its wallet integrates Neobank functions like the financial technology company Revolut and a non-custodial smart wallet for decentralized finance (DeFi) and cryptocurrencies.
This integration allows users to hold fiat (government-backed) and digital currencies as well as NFTs in a single platform.
The wallet is linked to the market, giving users the ability to directly select items that they desire.
CARBON doesn’t just work as a marketplace where purchases can be made, but also as an avenue where professional creators get to showcase their talents and inspire others to promote their own. It provides them with a winning environment.
How Tokenplace can help crypto traders get the best buy and sell prices
Any seasoned crypto trader knows that the price of a digital currency can vary across different exchanges worldwide.
Thus, one of the basic strategies for investing in digital currencies is to scout for the best buy or sell price and that’s where Tokenplace comes in.
Access to different crypto exchanges via one platform
To take full advantage of the price variance across exchanges, some traders often resort to opening accounts on different platforms. But Tokenplace eliminates this need because the platform allows one to access different exchanges worldwide.
This means that a user will only need his Tokenplace account and password to gain access to the entire crypto market. This is a lot simpler compared to having to main multiple accounts and passwords for other exchanges for different trading pairs.
Tokenplace is basically an online trading platform and exchange aggregator. With its automated order-splitting, orders are automatically broken up to ensure that traders get the best price for every coin they want to trade.
Easy to use and features-packed trading terminal
Tokenplace is also very appealing to newer investors because it is very easy to use. For instance, users will only need to access a single window for their deposits, withdrawals, trading, and exchanging.
The platform can be accessed from both desktop and mobile devices. Tokenplace’s onboarding and one-time registration process are also one of the quickest in the industry.
Tokenplace uses advanced algorithms for its multi-exchange order splitting feature. With this high-tech tool, users can get the best buy and sell price every time they trade.
IMPORTANT NOTE: This is a paid press release, which BitcoinerX has posted as part of a commercial agreement. BitcoinerX is not responsible for producing this content and does not endorse the products or services mentioned. It is the responsibility of the company posting the press release to ensure the material is credible and accurate. BitcoinerX is not responsible for any damage or loss caused to anyone who chooses to use the company, product or services mentioned in the press release. BitcoinerX does not recommend using the information in the press release to form the sole basis of investment decisions.
Mastercard adds 6 blockchain payments startups to accelerator program
Major Law Firm CMS Adds Stratis (STRAX) to its Legal Accelerator Program
Starcoll To Issue Limited Edition Star Wars Collectibles as NFTs
Pro traders buy the Bitcoin price dip while retail investors chase altcoins
S&P DJI Releases Bitcoin and Ethereum Indexes
eBay could add a crypto payment option, says CEO
China’s Central Bank to Partner With Alibaba’s Ant Group on Digital Yuan
Bitcoin Miners Moving Away from China, F2Pool Observes
Iranian companies can now pay for imports with officially mined cryptocurrencies.
‘This ain’t no game’ as DOGE briefly flippens Nintendo and takes #4 spot from XRP
CBDCs Could Harm Bitcoin But BTC May Replace Gold as a Store of Value: Deutsche Bank
The Reason for Ethereum’s Recent Rally to ATH According to Changpeng Zhao
Here Is Why XRP Volume Has Recover Across Payment Corridors
Bybit Launches Ether (ETH) Cloud Mining Service as Demand Booms
Another XRP lawsuit update: SEC accuses XRP Holders of ‘reciting’ Ripple’s litigation position
Qredo raises $11M in seed funding to launch new cross-chain asset management infrastructure
Singapore’s largest bank posts tenfold crypto volume growth in Q1 2021
S&P launches cryptocurrency indexes, debuting with Bitcoin and Ether
eBay is Considering Adding Crypto Payments & NFT Sales
Bitcoin and Ethereum Indices Debut on S&P Dow Jones
Blockchain1 week ago
Government Blockchain Association (GBA) announces the first release of “The Impact of Cryptocurrency Adoption on Government”
Blockchain1 week ago
University of Zurich Adds Cardano to their Blockchain Curriculum for 2021
Blockchain1 week ago
Aave v2 launches liquidity mining program targeting stablecoin borrowers
Blockchain6 days ago
Australian senate committee calls for national blockchain land registry
Blockchain1 week ago
Residents of Caribbean island can conduct local transactions using Bitcoin
Blockchain2 days ago
Mastercard adds 6 blockchain payments startups to accelerator program
Blockchain6 days ago
100M euro digital bond was a CBDC test, says Banque de France
Blockchain5 days ago
The Crypto Weekly Recap: ETH Eyes $3000, Bitcoin Dominance at 33-Month Low