Former SEC Chair Says Crypto is a Technology That Should Be in US Financial System

Former SEC Jay Clayton has praised crypto as a form of technology that deserves a place in the US financial system.

Former SEC Chair Jay Clayton has praised the potential embedded in cryptocurrencies and acknowledged that the technology deserves a place within the U.S. financial landscape. Clayton was speaking in a recent interview on CNBC, in which he continued a new habit of speaking favorably about the emerging industry. 

First, though, the former SEC Chair chimed in on the upcoming trial of disgraced FTX founder Sam Bankman-Fried, which begins today, October 3. The highly-anticipated trial, according to Jay Clayton, proves how important the US regulatory environment is.

While FTX largely operated its business abroad, Jay Clayton noted that existing US regulation would have prevented what is alleged to have happened in the FTX case. He alluded to the fact that the US provides safeguards to prevent the commingling of customer funds and mandates companies to segregate their assets. 

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After acknowledging the role of clear regulations, the former SEC Chair noted that the next step in the growth of the cryptocurrency space is incremental. This next phase, according to him, should focus on the integration of crypto within the US financial ecosystem. 

“We’ve decided every legal question around #Bitcoin. The $BTC spot market has much greater efficacy than it did,” says Fmr. SEC Chair Jay Clayton. “#Crypto is a technology. Let’s see that technology in our financial ecosystem. I believe that stablecoin is one of those places.” pic.twitter.com/hpn7gJx5di

— Squawk Box (@SquawkCNBC) October 3, 2023

Crypto Deserves a Place

The former SEC notably told the CNBC audience that crypto is a technology and the United States needs to see “that technology in [its] financial ecosystem and “in a place where regulators are “confident it is totally safe.”

Jay Clayton added that a “well-constructed and well-regulated stablecoin” is the perfect example of a safe application of cryptocurrency technology. However, he stopped short of mentioning his view on other crypto applications, a theme that has been at the heart of controversies between the SEC and the crypto industry.

Meanwhile, it is true that the Former SEC Chair has sounded more optimistic about cryptocurrencies in recent times. Yet one of his last enforcement actions in office included bringing a lawsuit against Ripple in December 2020, a few days before his resignation. This action suggests that Clayton’s most recent claims that crypto technology deserves a place within the US financial ecosystem may reflect a completely changed perspective on the industry’s potential or a hypocritical viewpoint.