Gary Gensler: Private Forms Money
on Friday, October 22, 2021Securities and Exchange Commission Chairman Gary Gensler Money Quote saying that stablecoins and cryptocurrency are private forms of money and may lack long-term viability. Gary Gensler said:
“Public money has a certain place around the globe, Private monies usually don’t last long, so I don’t think there’s a long-term viability for 5 or 6,000 private forms of money. History tells us otherwise” — Gary Gensler
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In this quote, Gary Gensler seems to be expressing skepticism about the long-term viability of a large number of competing private forms of currency or digital money existing simultaneously in the global economy. Specifically:
- Gensler notes that while “public money” or government-backed currencies have endured and circulated widely over long periods, “private monies usually don’t last long.”
- He implies that having 5,000-6,000 different privately issued cryptocurrencies, stablecoins or other digital assets is not realistically sustainable, as history shows most alternative currencies fade while a few standards emerge.
- Gensler argues that the proliferation of private monies on such a massive scale is unlikely to prove durable according to his reading of financial history where typically only a small number of monies survive in circulation over decades or centuries.
The best interpretation is that Gensler believes the current explosion of privately created cryptocurrencies vastly exceeds what can realistically coexist in global commerce long-term. From his perspective, market forces will eventually consolidate standards to a much smaller set of dominant private monies that achieve lasting viability, as has occurred with public currencies throughout history.