Gary Gensler says the SEC has no plans for a China-style crypto ban. Yahoo Finance’s Jennifer Schonberger shares the details.

Video Transcript

ZACK GUZMAN: I want to spotlight the moves we're seeing play out in crypto as Bitcoin spikes above the $55,000 level. After we heard from SEC chair Gary Gensler in House testimony yesterday, walking through a lot of different topics, particularly when it comes to regulation and protecting investors in crypto. And for more on all of what we heard, happy to welcome into the show, kick us off, Yahoo Finance's Jennifer Schonberger breaks down all that. Jen.

JENNIFER SCHONBERGER: Good afternoon, Zack. That's right, SEC Chair Gensler told the House Tuesday that crypto must be regulated to protect investors. Gensler doubling down on his tough approach.

GARY GENSLER: I think that the challenge for the American public is that if we don't oversee this and bring in investor protection, people are going to get hurt.

JENNIFER SCHONBERGER: Gensler did not back down on his view that many tokens are securities. He says the SEC has clear jurisdiction over crypto to classify many of these tokens as securities as Congress has defined what constitutes a security. He says the law deems anything is security if its value is dependent upon the work of others.

GARY GENSLER: I think that many of these tokens-- and it's based on the facts and circumstances, but many of these tokens do meet the test of being an investment contract or a note or some other form of security, that we bring them within the investor protection remit of the SEC.

JENNIFER SCHONBERGER: On stablecoins, Gensler again compared stablecoins to poker chips in casinos, saying states have long regulated how casino chips are backed, that it makes sense to regulate stablecoins. He says there could be different types of stablecoins, some that could be backed by deposits at banks, while others could be more like money market mutual funds with short-term paper. Now the Treasury is coming out with new rules on how to regulate stablecoins later this month. Both money market funds and traditional bank regulation is on the table.

Now, separately, when asked whether the US is looking to ban crypto as China has done, Gensler said the US approach is, quote, "quite different." When further pressed by a congressman on whether the US could ban crypto as a way of pushing a central bank digital currency in the way that China has done, well, Gensler said that's up to Congress. Zack.

ZACK GUZMAN: Yeah, and the buck does not just stop there with the SEC. As we've seen, there is a lot of people taking a closer look at crypto and how it should be regulated. Jennifer Schonberger kicking us off there with that recap. Thanks again for that.