The new head of the U.S. Securities and Exchange Commission (SEC) Gary Gensler has been discussing issues of digital currency regulation with counterparts in the European Union, in a session that was described as an “exchange of views” between the two regulatory blocks.
Appearing virtually before the Committee on Economic and Monetary Affairs at the European Parliament, Gensler said that advancing technologies were bringing U.S. and European markets ever closer together.
In particular, he drew parallels with the rise of the Internet in the 90s, and the profound impact that had on shaping financial markets and society more generally globally.
“I think the transformation we’re living through right now could be every bit as big as the internet in the 1990s.”
He also addressed digital currency assets specifically, noting that this was already a $2 trillion asset class operating around the clock, with “no borders or boundaries.”
Asked on whether there were opportunities for technology to improve regulation in digital currency markets, Gensler responded by saying there were, but that a combined approach between regulators was required to achieve the optimum results.
“Yes, there are technologies that can help the platforms on anti-money laundering and ensuring investor protections. But I also think it’s a combination of the hard and software on the platforms, the software particularly, and that which you do in your legislative body and what we do as regulators.”
The comments come following the publication of a recent poll of European stakeholders across member states, which found an overwhelming appetite for digital currency regulation to be handled at the state, rather than the supranational level.
The large-scale survey spanned 12 member states across the block, finding that a majority of the respondents would prefer to have digital currency regulated at the individual state level.
Some 31,000 people were surveyed across Estonia, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, the Netherlands, Poland, Portugal, and Spain, in the largest study of its kind.
A majority of respondents also said they preferred their own governments to create national digital currencies, as a mechanism for achieving financial independence from the European Union as a bloc. An average of 30% of respondents across each country came to the same conclusion with Greece (40%), Italy (41%) and Estonia (39%) heading the field.
The results come as the European Union ploughs ahead with plans to regulate digital currencies at the supranational level regardless, assuming authority for regulating the sector, despite 60% of those polled saying they would prefer this to be regulated by their own national governments.
The European Commission is currently pushing through regulations that would apply to digital currency assets across the block. In September 2020, it proposed a new digital finance package with legislative proposals for member states.
The Commission said the proposals would benefit the sector “by making rules safer and more digital friendly for consumers, the Commission aims to boost responsible innovation in the EU’s financial sector, especially for highly innovative digital start-ups.”
The developments in Europe come as Gensler and the SEC continue to set out their latest thinking on the regulation of the digital currency sector in the United States. Having recently assumed his post, Gensler has been clarifying his outlook on digital currency and his approach to regulation, with an emphasis on investor and consumer protections.
Despite his own previous academic interest in digital currency and blockchain tech, describing digital currencies in particular as “interesting,” Gensler has said he intends to look at the issues around digital currency regulation purely from the perspective of protecting consumers from investment risks around digital currency and digital asset investments.
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