SEC Chairman Says Weak Payment Mechanism Driving the Rise of Bitcoin

Jay Clayton, outgoing Chairman of the US Securities and Exchange Commission (SEC), said in an interview that Bitcoin was not a security, it was more like a stored value and a payment mechanism.

In an interview with CNBC’s Squawk Box, Clayton accepted inefficiencies in the current payment mechanism and added that the weak links in the payment structure are helping the rise of Bitcoin.

Sounding more optimistic about the future of cryptocurrencies, Clayton mentioned that the crypto market will mature by the time with more regulations around the digital payment space.

In the past, Clayton criticized Bitcoin and other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term and kept a tight rein on digital assets. Under his leadership, the SEC has blocked several ETFs from launching. However, in 2020, that stance has changed a little bit as it is more like a risk assessment than a complete ban.

“What we are seeing is that our current payment mechanisms, domestically and internationally, have inefficiencies. Those inefficiencies are the things that are driving the rise of Bitcoin... And we’re gonna see more of that. We’re gonna see this mature and we’re gonna see more Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term around the digital payment space,” Clayton said.

Not a Security

Clayton repeatedly said that Bitcoin was not a security as it was more like a payment mechanism. While talking about the ICO craze of 2017, Clayton mentioned that ICOs raised capital without even registering with the Commission. “When people use crypto assets as securities to raise capital for a venture, the SEC regulates that. And what was happening in the ICO craze was people were using ICOs and essentially making offerings of public securities without registering them with the SEC,” he added.

Earlier this month, the SEC Chairman confirmed his plan to conclude tenure by the end of this year. The crypto community feels that Clayton’s successor will ultimately approve or deny a Bitcoin ETF.