In a recent speech at New York University School of Law, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler made headlines with his assertion that cryptocurrencies like Bitcoin (BTC) are unlikely to ever become widely accepted forms of currency. While this statement may have grabbed attention, it largely reiterates what many industry participants already understand: the primary value of crypto assets lies in their utility as a store of value or an investment vehicle, not as a replacement for fiat currencies. Gensler’s comments, while perhaps technically accurate, miss the mark in addressing the real issues facing the crypto industry today.

A Misnomer: Cryptocurrencies as Currency

From the beginning, the term “cryptocurrency” has been something of a misnomer. Few, if any, in the industry still believe that digital assets like Bitcoin will serve as everyday mediums of exchange or replace government-issued money. Bitcoin may have been designed as a peer-to-peer electronic cash system, but over time, its primary use case has evolved into being a store of value—a “digital gold”—with limited transactional utility. Chairman Gensler’s assertion that crypto assets are unlikely to become currencies is more a statement of the obvious than a revelation.

Instead of focusing on this narrow point, regulators should address the more pressing questions: How should these digital assets be classified and regulated? How can we establish a framework that fosters innovation while protecting investors? And how can we ensure that the U.S. remains a global leader in this transformative space? These are the critical discussions that should be taking center stage, not a debate over whether Bitcoin can buy a cup of coffee.

Distracting from the Core Issues

Gensler’s comments seem to distract from the core regulatory issues plaguing the crypto industry. His focus on the currency debate diverts attention from the broader regulatory uncertainty that continues to stifle innovation in the U.S. While he continues to insist that most crypto assets should be treated as securities, he has not provided clear guidance on how the existing securities laws—originally designed for traditional financial instruments—should apply to an entirely new asset class.

This lack of regulatory clarity is creating confusion and, in many cases, driving innovators and entrepreneurs out of the U.S. market entirely. As I argue in my book, Regulating the Future of Finance and Money: A Rational U.S. Regulatory Approach to Maximizing the Value of Digital Assets, it’s time to move beyond piecemeal regulation-by-enforcement strategies and establish a comprehensive regulatory framework that recognizes the unique characteristics of digital assets.

Why Congress Needs to Step In

Gensler’s comments illustrate why the responsibility for establishing a clear regulatory framework should lie with Congress, not the SEC. Applying a nearly century-old regulatory regime to a cutting-edge technology is creating a mismatch that benefits no one. Congress has the power to craft new laws that specifically address the opportunities and challenges posed by blockchain technology, thereby providing the industry with the regulatory certainty it needs to thrive.

Fortunately, there are encouraging signs that lawmakers are beginning to tackle these issues head-on. Bipartisan efforts led by Reps. Patrick McHenry (R-N.C.) and Wiley Nickel (D-N.C.) in the House, as well as Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) in the Senate, are laying the groundwork for meaningful legislation that could finally provide the crypto industry with clear rules of the road. But these efforts need to be accelerated, and the conversation needs to shift away from the outdated question of whether digital assets will ever serve as a replacement for cash.

The Real Focus: Innovation, Investor Protection, and Global Competitiveness

What Gensler’s comments miss is that digital assets are more than just speculative investments—they represent a paradigm shift in how value can be transferred, stored, and verified. Blockchain technology has the potential to democratize access to financial services, reduce transaction costs, and increase transparency across various sectors. However, achieving this potential requires a forward-thinking regulatory framework that balances investor protection with the need for innovation.

Regulation by enforcement, as practiced by the SEC, is not a sustainable solution. It creates uncertainty and fosters an adversarial relationship between regulators and the industry. Instead, the focus should be on proactive engagement and collaboration to establish rules that are tailored to the unique features of digital assets. Otherwise, we risk pushing innovation offshore and ceding our leadership position to other countries that are more open to embracing new technologies.

Conclusion: A Call for Constructive Dialogue

Gensler’s comments on the unlikely future of crypto as currency may be accurate, but they do little to advance the conversation about how we can responsibly regulate this asset class. The reality is that most in the industry have already moved past the notion of digital assets as currencies and are focused on building a new financial ecosystem that operates alongside traditional systems.

It’s time for regulators and lawmakers to engage in a constructive dialogue that prioritizes clarity, innovation, and investor protection. By shifting the conversation away from tired debates and focusing on the real issues, we can build a regulatory framework that supports the long-term growth and development of the digital asset industry in the U.S.

By establishing sensible regulations, Congress can help cement the U.S. as the global leader in blockchain technology—ensuring that the innovation and economic growth generated by this technology remain within our borders.

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