SEC Chairman Gary Gensler told Congress that the crypto market needs more investor protection, likely dampening hopes of a bitcoin exchange-traded fund (ETF) being approved anytime soon.

United States Securities and Exchange Commission Chairman Gary Gensler, speaking to the U.S. Congress, said that the crypto market needed more investor protection. This may put a damper on hopes for a bitcoin ETF approval happening in the near future.

Bitcoin ETF dreams

A bitcoin ETF in the United States would be a major step forward in the market, as it would give users direct access to assets. Currently, there are indirect crypto investment ETFs that users can invest in, but this isn’t direct exposure to crypto.

Greater regulation and investor protection would indeed be a priority for an ETF, as direct access could result in a significant disruption of the market status quo. A lack of protection could hurt new investors, especially as crypto is a volatile asset class.

The SEC said two weeks ago that it would like an additional 45 days to approve VanEck’s Bitcoin ETF. Since then, VanEck has submitted a filing to create an ether ETF. All signs point to the first ETF arriving later than desired.

Other countries, like Canada, have already approved various ETFs. It’s likely that the U.S. will join in this decision soon, but it may be some time before that happens. In any case, with the most recent remarks, it’s unlikely to happen in 2021.

US taking a cautious approach

But then again, the U.S. is being extremely cagey about its approach to crypto regulation. Authorities have said little in the way of concrete information, and only in recent months has it been picking up regulatory discussions.

CBDCs, investor protection, general market regulation, and taxation are all on the table. The country’s authorities and agencies are now making tentative efforts to handle the burgeoning space.

The Biden administration, which appointed Gensler and Treasury Secretary Janet Yellen this year, said it is monitoring the development of China’s digital yuan. The digital dollar project, led by ex-CFTC Chairman Christopher Giancarlo, is another noteworthy effort.

Many countries have looked to the U.S. as an example, but in recent years countries have had to form their own frameworks to support innovation. Those doing so are reaping the benefits of the technological transformation, though it is not without its implementation challenges.

The U.S., meanwhile, has been urged by experts to get a move on. But all the actions and remarks so far indicate that they prefer to make a good decision instead of running headfirst into regulation.