Michael Saylor – Executive Chairman of the Bitcoin-bullish software company MicroStrategy – spoke at the Bitcoin 2023 conference in Miami regarding the trajectory of Bitcoin adoption as a Treasury Reserve asset, and its place next to crypto in the US regulatory perimeter.
The former CEO addressed whether the so-called “lack of clarity” surrounding crypto regulation in the United States is “by design,” and how regulatory agencies actually view digital assets.
What the SEC Doesn’t Like, According to Saylor
In an interview with Kitco NEWS published on Monday, Saylor said that he believes regulators are opposed to stablecoins effectively allowing billions of US dollars to circulate in “dark pools,” thus evading the controls of the banking system and sanctions. “Stablecoins are a problem for them, and I don’t think they’re going to change their view,” he said.
He also believes regulators have already concluded that most crypto tokens are unregistered securities that are being manipulated by their issuers, who have not released proper disclosures about those assets. This would align with the view of Securities and Exchange Commission (SEC) chairman Gary Gensler, who has only shown a public willingness to label Bitcoin as a commodity.
“The meltdown of FTX was a catalytic event that caused the regulators to decide that crypto exchanges, crypto securities, and cryptocurrencies that imitate the dollar are not really consistent with a stable world financial system,” said Saylor.
The US government has launched a multi-front attack on the crypto industry since FTX fell apart, including the SEC’s $30 million fine against Kraken in February, and Wells Notice against Coinbase for a similar product in April. Coinbase responded by compelling the SEC to respond to its request for clearer crypto regulations, which the SEC now wishes to strike down.
What’s Stopping Bitcoin Adoption?
While Bitcoin itself doesn’t face the same types of regulatory threats, Saylor notes that there are still milestones to overcome on its way to larger institutional adoption.
One is a matter of accounting: Bitcoin is currently transitioning from using an “indefinite intangible” to a “fair value” accounting framework, which will let companies holding BTC on their balance sheets mark their crypto investment gains – not just their losses.
Another hurdle is related to “crypto confusion,” with companies conflating Bitcoin with the rest of the crypto market. “A lot of people had a hard time distinguishing between Bitcoin and FTX, and FTT token, and Terra, and Luna token, and all these other crypto assets,” explained Saylor.
Nevertheless, Saylor believes Bitcoin will benefit once regulators “clean up” the crypto industry. “Until that’s resolved… I think there are a lot of conservative investors that just stand off and wait.”