Jefferies’ equity strategist expects US crypto regulation to change in contrast to China’s authoritarian model – regulation Bitcoin News
The head of global equity strategy at Jefferies, an investment bank and wealth management firm, says US cryptocurrency regulation would be “ultimately very positive” for bitcoin or other crypto assets. It will also be more accommodating than China’s authoritarian approach to crypto regulation.
US regulation would be “ultimately very positive” for the mass adoption of bitcoin and cryptocurrencies
Christopher Wood, Head of Global Equity Strategy at Jefferies, discussed cryptocurrency regulation in his latest weekly research report, Greed & Fear.
Jefferies is a diversified financial services company active in investment banking and capital markets, wealth management, and direct investment. The company claims to be “the largest independent, global, full-service investment banking company headquartered in the United States,” according to its website.
Wood reportedly said that the US cryptocurrency regulatory response is likely to be more accommodating than “China’s authoritarian model” given the rapidly deteriorating state of US-China relations.
He expects the US Securities and Exchange Commission (SEC) to present a final regulatory roadmap, citing new SEC chairman Gary Gensler, who is pushing for a regulatory framework for cryptocurrencies. Gensler has repeatedly said that crypto exchanges need more regulation and called on Congress to get involved. Wood said:
Ultimately, that would be very positive, as Bitcoin or other crypto assets can only really exploit their network potential in the sense of mass adoption if they become part of the system.
Recently, China cracked down on Bitcoin mining and the People’s Bank of China (PBOC) reminded the country’s banks that they are prohibited from engaging in crypto-related activities. According to industry estimates, over 90% of China’s bitcoin mining capacity has been shut down.
Explaining that China does not want its citizens to own cryptocurrencies, Wood stated:
This is partly due to the clear possibility of using so-called stablecoins like Tether to bypass the closed capital account. This is mainly because China does not want any competition in the national introduction of the digital renminbi, probably in the fourth quarter of this year.
China is actively working on a central bank digital currency (CBDC) and testing the digital yuan in various cities. Over 3,000 ATMs in Beijing now offer digital yuan withdrawals. Some analysts believe that China’s absolute control over its state-backed digital currency will fuel demand for cryptocurrencies.
Wood stated, “Sure, the decentralized aspect of blockchain technology that is so appealing to libertarians who reject fiat currencies as state monopolies is the complete opposite of China’s collectivist system. The People’s Republic of China clearly understood this. This is certainly a far more important issue for Beijing than the carbon-generating aspects of Bitcoin mining. “
Jefferies reduced its gold exposure in favor of Bitcoin in its recommended portfolio for US dollar-denominated pension funds in December last year. “The 50% weighting of physical gold bars in the portfolio will be reduced by five percentage points for the first time in several years with the money invested in Bitcoin,” Wood said at the time. The company has retained a 5% BTC stake in the portfolio.
The SEC and the CFTC recently warned investors about funds investing in bitcoin futures. While Gensler has pushed for cryptocurrency regulation to protect investors, the SEC removed bitcoin and cryptocurrency from its regulatory agenda this year.
Do you agree with Chris Wood on bitcoin and crypto regulation? Let us know in the comment section below.
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