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SEC Chairman Says Cryptocurrencies Are ‘Replacements for Sovereign Currencies’ Russia Disagrees


On June 6, SEC Chairman Jay Clayton spoke with CNBC about the federal government’s perception on cryptocurrencies. Clayton began by describing distributed ledger technology as having ‘Tremendous promise. It can drive efficiencies in not just financial markets, but in a lot of markets.’ Clayton went on to say that,

“Cryptocurrencies are replacements for sovereign currencies- [they] replace the dollar, the yen, the euro with bitcoin. That type of currency is not a security.”

The statement is a profound one given its coming from the SEC Chairman, and is great news for the legitimacy of cryptocurrencies. Clayton then went on to give a rather warm description of ICOs. He described ICO tokens as digital assets, and comfortably compared them to stocks.

“A token, a digital asset, where I give you my money and you go off and make a venture, and in return for me giving you my money you say, ‘You know what? I’m gonna give you a return or you can get a return in the secondary market by selling your token to somebody’ — that is a security and we regulate that. We regulate the offering of that security and we regulate the trading of that security. That’s our job and we’ve been doing it for a long time.”

There seems to be a growing likelihood that we will be seeing federally regulated trade of cryptocurrencies and ICOs on US exchanges in the near future. If you haven’t yet, check our report yesterday on Coinbase acquiring licenses to become a federally regulated blockchain securities trading venue. Clayton continues,

“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules. There’s no secondary trading, you have to do that. If you want to do an IPO with a token come see us, file financial placements, file disclosure, take the responsibility our laws require, and we’re happy to help you do that public offering.”

Interestingly, The SEC’s assessment of cryptocurrencies stands in stark contrast with the viewpoint of Russian President Vladimir Putin and the Russian Analytical Credit Rating Agency (ACRA). In a report released yesterday the ACRA deemed cryptocurrencies inefficient, insecure, and unlikely to be scalable- “All of these factors lower the value of the potential advantage, which is the reduction in the number of intermediaries in settlements.”

Putin also stated in his annual call in tv show that, “The relationship of the Central Bank of the Russian Federation to cryptocurrency [is that] it considers cryptocurrency neither a means of payment nor a store of value. Cryptocurrency is not backed by anything. One should treat it cautiously, carefully.”

Russia’s official position on cryptocurrency will be drawn out in a bill coming out by July 1, which will regulate the entire industry in the country.

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