Head of SEC clarified US’s regulation regarding cryptocurrencies. Bitcoin is being explained as a store of value. Suggested Bitcoin’s growth is due to the accustomed inefficiencies prevailing in the traditional payment system.
Jay Clayton, Chairman of Securities & Exchange Commission (SEC) of US, had recently recorded an interview with CNBC Squawk Box. In his interview he had commented upon the existence of cryptocurrencies and, in particular Bitcoin, in the US financial industry. During the interview Clayton had been found stating that Bitcoin is a store of value.
Furthermore, he had clarified the prerogative of US regulator relating to cryptocurrency. He started off by replying to the statement of Jamie Dimon, the CEO of JPMorgan. Dimon had earlier said that Bitcoin does not appeal to him even though the coin’s market capitalization is over US$ 340 Billion. He also stated that sooner or later US government would be regulating Bitcoin, whenever it felt like doing so.
Clayton told CNBC that to SEC Bitcoin is more than that of an alternate mode of payment. He explained that Bitcoin in its structure is a store of value by all means and cannot be called as “securities”. Clayton added that SEC had never intended to regulate Bitcoin as security. He further explained.
He also explained that when people use cryptocurrencies in an effort to raise capital then its structure changes. He made a mention of ICOs which were increasingly being used by crypto-exchanges to raise funds in the past. Clayton clarified that as per the US laws, the securities are required to be registered with the US SEC.
Clayton also commented upon the traditional payment systems. He said that traditional payment systems are under regulation by US Government. But there are several inefficiencies prevailing in the current system for long that haven’t been corrected till date. This paved the way for the Bitcoin to emerge as an alternate source of payment solution. And since there were no inefficiencies, it allowed Bitcoin to grow exponentially.
Clayton had been the Chairman of US SEC for the past 3 years. He told that he now plans to leave the Regulator’s office very soon.