SEC Chair Gary Gensler hopes for crypto exchange regulation in 2022

Yahoo Finance's Jennifer Schonberger joins the Live show to recap her interview with SEC Chair Gary Gensler where he discussed his hope for crypto exchange regulation in 2022 and the outlook for stablecoin regulation.

Video transcript

- Crypto correspondent Jan Schonberger has more on then. Jen.

- Securities and Exchange Commission chairman Gary Gensler says he hopes to regulate cryptocurrency exchanges this year while warning about stablecoins. In a media availability on Wednesday, I asked Chair Gensler whether this would be the year that the SEC would regulate cryptocurrency exchanges. He told me, quote "you shouldn't put timelines on yourself. But I will say I sure hope so. If the trading platforms don't come into their regulated space this would be another year of the public being vulnerable." Gensler reiterated there are real vulnerabilities with cryptocurrency exchanges, calling crypto a quote, "highly speculative asset class" and underscoring that the platforms might be registered in some jurisdictions for light consumer protection. But that's not about market integrity.

Meanwhile, Washington very focused on how to regulate stablecoins. When asked whether the SEC would look to levy regulations on stablecoins this year Gensler, told me, quote, "I don't want to get ahead of any one discussion with outside folks or anyone possible investigation." Now, Gensler says he's also working closely with other regulators, such as the head of the CFTC, Treasury Secretary Yellen, as well as the Federal Reserve and the FDIC on new rules.

In general, Gensler says he wants to bring stablecoins and crypto within the regulatory perimeter and to the extent that any actors or anyone is operating outside of that perimeter, the SEC is prepared to bring enforcement action. Now, some analysts have said that stablecoins could be regulated by the SEC akin to money market funds with new disclosures and liquidity requirements. When asked about that, Chair Gensler said he does see some similarities between stablecoins and money market funds. So guys, this could be the year that the SEC could levy regulations on cryptocurrency exchanges as well as the space. Back to you.

Hey, Jen. I'm curious what you're hearing from crypto people about this latest, right? Because there has been this sort of attitude I feel like from those in the crypto community that those in Washington just don't get it. And I wonder if you've heard any reaction to some of the SEC's latest moves here.

- Well, let me take it a little bit broader than that, Julie. I will say that there was a hearing at the tail end of last year before the House Financial Services Committee where many CEOs of crypto companies testified and they felt that they had a really good dialogue with lawmakers and that lawmakers are gaining a better understanding, I will say, in speaking with certain senators, that they are really diving into this and trying to get a better handle on things so that they do regulate this space properly. At the same time, I think the industry is hungry for rules of the road so that there will be better clarity. And analysts that I speak with say that there are a number of institutional investors waiting on the sidelines to get into crypto if they had better rules. So it's kind of a push and pull here.

Indeed it is. Yahoo Finance's crypto correspondent Jen Schonberger. Good to see you.

Thank you.

All right. Coming up we'll have some--