SEC Chair Gary Gensler - Bitcoin is unlikely to become a currency

[Natalim]

Well don't be so sure mate, the world is evolving and there are so many things that would change in time coming so don't be surprised to see that Bitcoin has achieved a new height sometime in the near future.

It’s really not that hard for a country to consider Bitcoin as a legal currency as long as they already recognize it. Like in the US, Bitcoin is already seen as property, so if they recognize it as a currency, the only thing that would change is how it’s taxed. And let’s not assume that once it’s recognized as a currency, people will abandon fiat, that’s not going to happen because Bitcoin is just too volatile for everyday transactions.

Their is no doubt that Bitcoin investment is practically the major use as of now but we can't deny the fact that even if Bitcoin is used majorly as a stored of value there are still a small portion of people that relate to it as a currency although the margin is big when you compare the two but time is something that can change a whole lot of things so am still positive that Bitcoin would achieve and more over Bitcoin is still just in it's early stages and still lots of growth to undergo

The state only sees it as property to impose laws on it, but for us regular users, Bitcoin is a currency, we use it for transactions. What we really need is more people using it for everyday transactions rather than just holding it, as that’s what will help grow the ecosystem. So, let the government think whatever they want about Bitcoin, as long as they don’t ban it, we can keep enjoying it...even if they call it “property.”

It’s funny though, calling it “property” when it’s used for online transactions. That’s a role that fits a currency, right?

One day, the government will definitely wake up to this!

[FortuneFollower]

By "currency," it doesn’t necessarily mean the main currency--fiat will definitely stick around. The point is that people should have more options, not just seeing Bitcoin as a "store of value" (which I agree with), but it could also be used as legal tender so we can enjoy Bitcoin even more!

I don't think he is entirely wrong. I disagree with him, but I understand where he's coming from. From his speech, he is not against crypto but he's saying people don't pay attention to the currency side of bitcoin. Everybody is only focused on the asset/investment side. As a matter of fact, some people don't even know that Bitcoin is a currency, they just know it as something you can invest in.

I don't think many countries will accept Bitcoin as legal tender, and that is fine as long as it is not illegal to use and accept it as a means of payment. There will be more countries that will make Bitcoin legal tender, but I don't think it will be much and we have to get used to that. As long as people are free to use Bitcoin anywhere and anytime then it's all good.

Well don't be so sure mate, the world is evolving and there are so many things that would change in time coming so don't be surprised to see that Bitcoin has achieved a new height sometime in the near future.

Their is no doubt that Bitcoin investment is practically the major use as of now but we can't deny the fact that even if Bitcoin is used majorly as a stored of value there are still a small portion of people that relate to it as a currency although the margin is big when you compare the two but time is something that can change a whole lot of things so am still positive that Bitcoin would achieve and more over Bitcoin is still just in it's early stages and still lots of growth to undergo

For now, govs and institutions see BTC as the means to store value and gain something out of it / be prepared and have reserves of it, however, yeah, the future brings lots of stuff with it. However, I doubt that BTC would become a go-to crypto solution in terms of replacing fiat. I would say though that BTC would just become and is a digital gold.

[legiteum]

It’s funny though, calling it “property” when it’s used for online transactions. That’s a role that fits a currency, right?

One day, the government will definitely wake up to this!

USD is "property" too.

And you can use your house or a car in a transaction, so it's also a currency.

You guys are really reaching trying to find something wrong with what Gensler said here. He certainly has had his problems, and I'll be glad to see him replaced by Mark Cuban when Harris gets elected, but he's not wrong to call Bitcoin "property" because that's exactly what it is.

[bitLeap]

What do you guys think about this? We know only two countries have declared Bitcoin as legal currency--El Salvador (the most famous one) and the Central African Republic. If they've done it and their economies haven't seen any major issues, like a spike in crime, then why does the SEC chair say it's unlikely for Bitcoin to become a currency?

By "currency," it doesn’t necessarily mean the main currency--fiat will definitely stick around. The point is that people should have more options, not just seeing Bitcoin as a "store of value" (which I agree with), but it could also be used as legal tender so we can enjoy Bitcoin even more!

Everyone knows Gary Gensler so what he said is not wrong because it is in accordance with his path and profession. It is a natural realm for him to maintain the stability of the financial risks of his duties from the beginning. Gensler tried to remind that not everyone uses bitcoin, so I prefer to let him do his job and we remain at odds with Gensler policies.

You can still enjoy bitcoin without having to wait for official government policies, isn't it still like that now? I agree that it's better to have more choices, but not everything has to be forced.

[ShowOff]

I agree, bitcoin does not have to be the main currency to replace fiat, but bitcoin can be used as a legalized alternative currency. We know why many governments are afraid to legalize bitcoin or other cryptocurrencies as currency, the most common being that they are afraid that fiat dominance will decline.

Bitcoin has the power to influence users to use it as a means of payment or currency. Bitcoin has better advantages than fiat, so there is a possibility that fiat dominance will decrease if bitcoin is legalized. Maybe that's the reason the government doesn't want to say why they don't want to legalize bitcoin as a means of payment or currency.

[jakelyson]

It’s really not that hard for a country to consider Bitcoin as a legal currency as long as they already recognize it. Like in the US, Bitcoin is already seen as property, so if they recognize it as a currency, the only thing that would change is how it’s taxed. And let’s not assume that once it’s recognized as a currency, people will abandon fiat, that’s not going to happen because Bitcoin is just too volatile for everyday transactions.

I agree that Bitcoin can not replace the use of Fiat Currency but in some cases when the Currency fails the country the Cryptocurrency could take over as an alternative but not take over as a whole, yeah in some given circumstances it can temporarily be replaced because their economy have failed them I forgot the country and where did I watch this but when I could seen it again I will share it with you guys.

The state only sees it as property to impose laws on it, but for us regular users, Bitcoin is a currency, we use it for transactions. What we really need is more people using it for everyday transactions rather than just holding it, as that’s what will help grow the ecosystem. So, let the government think whatever they want about Bitcoin, as long as they don’t ban it, we can keep enjoying it...even if they call it “property.”

It’s funny though, calling it “property” when it’s used for online transactions. That’s a role that fits a currency, right?

One day, the government will definitely wake up to this!

Let's say that we really don't need the state for us to be free of our financial needs but we still need the country's currency to convert some Cryptocurrency to be used in certain countries and the term property is not really appropriate to even use with Cryptocurrency I think we can call this as an asset instead of calling it property and because we are using it in a different transaction.

In addition to the Gary Gensler issue I think I have seen a piece of news that he will be replaced soon by a person who is positive with cryptocurrency if that happens maybe the value of certain coins will surely skyrocket when that happens but what do you think who's going to replace him in the future when he resigns.

https://www.ccn.com/news/crypto/next-sec-chair-gensler-replacement-odds-gallagher-giancarlo-peirce/

[Swordsoffreedom]

I agree, bitcoin does not have to be the main currency to replace fiat, but bitcoin can be used as a legalized alternative currency. We know why many governments are afraid to legalize bitcoin or other cryptocurrencies as currency, the most common being that they are afraid that fiat dominance will decline.

Bitcoin has the power to influence users to use it as a means of payment or currency. Bitcoin has better advantages than fiat, so there is a possibility that fiat dominance will decrease if bitcoin is legalized. Maybe that's the reason the government doesn't want to say why they don't want to legalize bitcoin as a means of payment or currency.

If they accept bitcoin as an alternative currency then surely fiat dominance will decrease significantly but what I am thinking is: what reason do they have to use bitcoin as an alternative currency? I mean: they don't need an alternative currency now, they never intended to because if they wanted, they could create one themselves instead of using bitcoin.

Governments are not afraid of using bitcoin as a currency but the problem is they don't need an alternative because the fiat system is working very well (in their eyes and for them), IMO.

I guess even if bitcoin becomes centralized and they can control it, they won't make it a currency because they don't have the need.

[Easteregg69]

I read from the bottom up now. Better go get some beers..

That whole bitcoin scenario is partly about liquidity.

[NotATether]

why does the SEC chair say it's unlikely for Bitcoin to become a currency?

Bitcoin is already a currency. What is he talking about?

We have people holding Bitcoin, Ethereum, Monero, TON, even stablecoins of their country's own dollar. And they're buying stuff with all that too. Is this not using currency?

I tend to think that these financial people don't see the competition that's coming for them, like most executive leadership of monopolies. If they don't embrace this it will not end well for them profit-wise.

[Russlenat]

why does the SEC chair say it's unlikely for Bitcoin to become a currency?

Bitcoin is already a currency. What is he talking about?

We have people holding Bitcoin, Ethereum, Monero, TON, even stablecoins of their country's own dollar. And they're buying stuff with all that too. Is this not using currency?

I tend to think that these financial people don't see the competition that's coming for them, like most executive leadership of monopolies. If they don't embrace this it will not end well for them profit-wise.

This guy definitely isn’t a moron. And being the chair of the SEC in the US, he’s fully aware of what Bitcoin is and how crypto works in general. He knows it’s a currency, but what he’s emphasizing in his opinion is that he doesn’t see Bitcoin becoming a legal currency in the future, like in El Salvador, where it’s already considered legal tender.

Gensler’s main concern is how US laws apply to Bitcoin, and his statements likely reflect how he thinks the country will treat it. As I’ve mentioned before, the debate here is about the difference between Bitcoin being considered property (as it’s currently classified in the US) and being a legal currency, which is what he’s referring to.

[legiteum]

This guy definitely isn’t a moron. And being the chair of the SEC in the US, he’s fully aware of what Bitcoin is and how crypto works in general. He knows it’s a currency, but what he’s emphasizing in his opinion is that he doesn’t see Bitcoin becoming a legal currency in the future, like in El Salvador, where it’s already considered legal tender.

Gensler’s main concern is how US laws apply to Bitcoin, and his statements likely reflect how he thinks the country will treat it. As I’ve mentioned before, the debate here is about the difference between Bitcoin being considered property (as it’s currently classified in the US) and being a legal currency, which is what he’s referring to.

I don't think he's talking about taxation at all (which is the only thing tangible about the distinction if "property" here). He is talking about a currency in the sense of it being a mainstream means of payment, e.g. like credit cards, PayPal, and so on. In that context he is absolutely right: Bitcoin was never designed to do that, and is architecturally prohibited from doing so.

In El Salvador, they specifically changed the tax code there to exempt Bitcoin gains from their capital gains tax. They could do that in the US as well, but it would be absurdly unfair to all of the other things people could invest in, e.g. real estate, stocks, small businesses, farms, and so on.

Here in the US, people have been debating the capital gains tax for decades, with many arguing we should get rid of it. That debate will continue, and perhaps someday they will abolish this tax. But there's absolutely zero chance they will pick one investment instrument out of the thousands there are to be tax exempt and everybody else has to pay taxes. That will never fly, politically.

(The only exception I can think of is Trump making his own coin tax exempt so it kills Bitcoin and every other crypto and makes him a trillionaire ).

[stadus]

In El Salvador, they specifically changed the tax code there to exempt Bitcoin gains from their capital gains tax. They could do that in the US as well, but it would be absurdly unfair to all of the other things people could invest in, e.g. real estate, stocks, small businesses, farms, and so on.

That's right, and it won't happen in the US because Bitcoin is treated as property, while in El Salvador, it's considered legal tender....

Even though both are technically currencies, how a country legally classifies them makes all the difference, especially when it comes to taxation. To end the debate about capital gains in the US, the government would have to push for Bitcoin to become legal tender. But as SEC Chair Gary Gensler pointed out, he believes that’s unlikely to happen.

[Free Market Capitalist]

What do you guys think about this?

I think he is right as I think exactly the same.

He has chosen the word “unlikely” very well. I don't think it's impossible but as things stand the future of bitcoin is mainly in being a store of value, not a medium of exchange, and that's already the case today.

[legiteum]

That's right, and it won't happen in the US because Bitcoin is treated as property, while in El Salvador, it's considered legal tender....

But Legal Tender has nothing at all to do with taxation. Congress could make Bitcoin (or shares of AAPL, or whatever) officially Legal Tender, and gains would still be taxed. All Legal Tender says is that court settlements must accept this form of payment to settle a debt. It doesn't do anything else. El Salvador passed an additional law specifically exempting Bitcoin from their capital gains tax.

To end the debate about capital gains in the US, the government would have to push for Bitcoin to become legal tender. But as SEC Chair Gary Gensler pointed out, he believes that’s unlikely to happen.

If you made Bitcoin investments tax free, then Apple would scream that shares of AAPL should be tax free, and farmers would scream that they sale of their farm should be tax free, and people who invest in gold would scream that gains from gold should be tax free, and people who invest in other cryptos would scream, and so on for thousands of other investments.

It's never going happen because it would be stupid and unfair, not because of some anti-Bitcoin conspiracy.

[henmark]

Even though none of us like Gary for what he has done for the crypto industry. But we should be realistic and accept the fact that turning bitcoin into a currency is a difficult task and the chances of it happening are almost zero. 

What he have done with cryptos? But when I searched it I only saw that he regulated it. I think this isn't totally bad and actually or in fact, it might also offer some benefits. So there are actually people that will like Gary in fact for what he have done there on cryptos. BTC is a currency but it is just that many people are only treating their BTC now like an investment asset, as they see that its value is growing very well.

Another reason on why some can get turned-off of using a BTC as a currency is due to the fact that its fees are a bit high and then the processing time for it is also slow but there are fixes who have been rolled out already for this. It can only be improved more overtime (I believe), so don't lose hope just yet mate. I know we can re-gain the other charm of BTC that once lost once again.

[tygeade]

If they accept bitcoin as an alternative currency then surely fiat dominance will decrease significantly but what I am thinking is: what reason do they have to use bitcoin as an alternative currency? I mean: they don't need an alternative currency now, they never intended to because if they wanted, they could create one themselves instead of using bitcoin.

Governments are not afraid of using bitcoin as a currency but the problem is they don't need an alternative because the fiat system is working very well (in their eyes and for them), IMO.

I guess even if bitcoin becomes centralized and they can control it, they won't make it a currency because they don't have the need.

This is literally the reason why they do not support bitcoin all with heart. Because if bitcoin becomes bigger and bigger, that will put all these currencies in trouble and at a risk of not getting used. Imagine a world where everyone just uses their phones to pay bitcoin for everything, right now we do not have the fast pace and transaction costs to do this because it would be days to process a single transaction that cost hundreds if everyone were to use it.

But imagine if that was instant and free, and everyone used it, then world currencies would crash, fiat would be gone, and nations would be powerless without fiat. This is why we need to continue with the world as it is, and they want this status quo to continue in order to keep their power. I believe we are going to have a lot more push back, but so far the push back has been small, nothing big happened, governments are not attacking crypto and even making ETF and CBDC stuff happen which helps us.

[legiteum]

This is literally the reason why they do not support bitcoin all with heart. Because if bitcoin becomes bigger and bigger, that will put all these currencies in trouble and at a risk of not getting used. Imagine a world where everyone just uses their phones to pay bitcoin for everything, right now we do not have the fast pace and transaction costs to do this because it would be days to process a single transaction that cost hundreds if everyone were to use it.

Bitcoin uses $40 billion in hardware to process about 500k transactions per day. There are several billion transactions in the world every day. Do the math: Bitcoin will never ever ever get within orders of magnitude of handling the world's transactions.

That is why Bitcoin is not used for mainstream transactions, not because of some government conspiracy.

[Jawhead999]

This is literally the reason why they do not support bitcoin all with heart. Because if bitcoin becomes bigger and bigger, that will put all these currencies in trouble and at a risk of not getting used. Imagine a world where everyone just uses their phones to pay bitcoin for everything, right now we do not have the fast pace and transaction costs to do this because it would be days to process a single transaction that cost hundreds if everyone were to use it.

Yep, people are more educated now, many people have advising to invest their money instead of savings. Fiat have value because people trust them and the government force the citizen to use that "paper money", if they allow everything for legal tender, people might abandon fiat.

but so far the push back has been small, nothing big happened, governments are not attacking crypto and even making ETF and CBDC stuff happen which helps us.

ETF do not help Bitcoin, instead it's a hidden attack because they want to control Bitcoin.
CBDC is actually the same like fiat, but in digital version. Not really attacking Bitcoin, but for sure it won't help anything to Bitcoin.

[Antotena]

What do you guys think about this? We know only two countries have declared Bitcoin as legal currency--El Salvador (the most famous one) and the Central African Republic. If they've done it and their economies haven't seen any major issues, like a spike in crime, then why does the SEC chair say it's unlikely for Bitcoin to become a currency?

By "currency," it doesn’t necessarily mean the main currency--fiat will definitely stick around. The point is that people should have more options, not just seeing Bitcoin as a "store of value" (which I agree with), but it could also be used as legal tender so we can enjoy Bitcoin even more!

In as much as I hate this guy badly and don't want to associate my mental health with their discussions, I think sometimes they make a point in their talks. Bitcoin was never initially design to be a currency but a digital electronic coin to transfer value from one person to another without any barrier of middle person but right now, it's a currency to some people, there are people that are ready to accept Bitcoin as a settlement of debts and means of payment.

He is right but he is saying that in reference to traditional finance, even the countries that has legal Bitcoin as legal tender are having low patronage, so it's going to be less likely to see Bitcoin as a currency and we know it's terrible because of volatility but on the Bitcoin level, those who will use it as a settlement will use it as long as there is a buyer willing to give to the seller.

[Russlenat]

.... but on the Bitcoin level, those who will use it as a settlement will use it as long as there is a buyer willing to give to the seller.

Depending on what you buy, especially if it’s property and you use Bitcoin in a country like China where trading or selling Bitcoin is banned, you might face legal issues later. For the transaction to be legitimate, it requires a contract, but since you've violated the law, it complicates things.

In the USA, it’s different since Bitcoin is legal but treated as property.... So when you buy real estate, you’ll have to deal with paying capital gains tax based on the difference between when you bought the Bitcoin and when you use it to purchase the property. So essentially, you’re trading property for property, but when the seller converts it to fiat at a higher value, they’ll also face capital gains tax. It’s a bit complex. It would be simpler if Bitcoin were treated as currency, with only a basic tax applied.