Former SEC Chairman: Digital Assets Will Change Global Financial Infrastructure

Jay Clayton, former chairman of the U.S. Securities and Exchange Commission (SEC), said that digital assets will transform the global financial infrastructure, but it is unclear which assets are the most transformative.

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“I see digital assets, whether they’re … tokenized traditional securities, stablecoins, or new types of assets, as part of our global infrastructure,” he said in an interview .

“You need to separate tokenization and cryptography from cryptocurrencies,” Clayton said. “If you look at the prospect of combining tokenization and smart contracts in our financial infrastructure, two things stand out.” He added that the first is the efficiency gains available in the existing infrastructure, and the second is the opportunity to enter more markets and create new ones that come with efficiency.

He said the impact of crypto on cross-border payments could provide guidance for future developments.

Clayton has recently become an advocate. He gained notoriety in the crypto industry in late 2020 after he charged Ripple and two of its executives with an unregistered securities offering.

In December 2021, he wrote an op-ed in the Wall Street Journal about how the future of the United States depends on blockchain, and time is of the essence for America’s adoption of the technology.

“It seems to me that this asset class is going to exist in one form or another. Whether it’s a stablecoin or something ,  Clayton said .

He estimates that there are many paths forward for the industry. One of the paths, he said, is for stablecoins to correspond to our current system. In the current system, government stablecoins are used in the regulated banking system, and regulated stablecoins are used for institutional or consumer purposes.

However, the current leadership of the SEC and the Federal Reserve has raised some concerns about stablecoins. SEC Chairman Gary Gensler likened them to poker chips in September 2021, as previously reported by BitTweet.

Separately, in July 2021, U.S. Federal Reserve Chairman Jerome Powell said stablecoins pose a threat and exist within an “underdeveloped regulatory framework,” but later assured market participants that he did not intend to Digital tokens are prohibited.

“I believe in the fundamentals of our regulatory structure, and I don’t think they should change,” Clayton said. “(These technologies) can serve a regulatory function, at least as well as existing technologies. We should facilitate their incorporation into our financial infrastructure, but we Regulatory principles and goals should not be relaxed to advance this technology.”

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