Interview with 'Crypto Mom” Hester Peirce: What would you do if you became SEC Chairman?

Compiled | Wu Talks about Blockchain

US SEC Commissioner Hester Peirce shared her views on cryptocurrency regulation, the Bitcoin ETF approval process, market futures, and the future in an interview with Coinage’s Zack Guzman regulatory direction. She also discusses the impact of SAB-121 and Congressional efforts to define securities versus commodities. Peirce emphasized the importance of industry self-regulation and the role of government and expressed optimism about future changes in regulatory culture.

Original text:

https://www.coinage.media/s3/ethereum-etfs-potentially-able-to-stake-in-the-future-secs-peirce

Ethereum ETF approved without committee vote, behind the scenes What is the actual situation?

Peirce: No committee vote is not that unusual. A lot of these ETP approvals are done at the delegation level, meaning we delegate authority to staff who can approve them without a formal committee vote. But I think that's not surprising because we have Bitcoin exchange-traded products. The court told us we had to basically move forward, and that's what happened. Then applying the same logic, we really don't have much choice in approving these ETPs.

What is the difference between Bitcoin ETF and Ethereum ETF?

Peirce: I think the Bitcoin ETF is really unusual because after years of building up and so many different people trying to get approval, eventually they are all going to come online and everyone knows they are going to come online at the same time and there is so much anticipation around it . While there are expectations around ETH ETFs, what we're seeing is an iterative process where they get approved on the trading and market side and then still need to go through the corporate finance process, which is what's happening now. So I think the atmosphere around the ETH ETF is much calmer. I think this is the main difference. Realistically, we shouldn't be looking to create drama when a product like this is launched, they should go live and trade and then we see if people are willing to buy it, that's how it should work.

Staking was removed from the application early on, why and is there any possibility of changes?

Peirce: Regarding the staking part that was moved out of the application, I don’t comment on what happened between the staff and the issuer. However, I think that products with certain functions, such as staking or other functions, can always be reconsidered.

Does the application for Solana ETF require the futures market to be approved?

Peirce: I'm a little hesitant to comment on these applications because they're in front of us. I can't comment on them. What I can say is that we have to look at the facts and circumstances. What people need to do is they need to look at previous ETP precedents, not just crypto ETPs but other kinds of ETPs, and make the case for why they can be approved under existing laws and rules. So we have to look at it on a case-by-case basis.

I think people need to look at if there are other types of markets or products that don't have futures markets as a basis and then they can make a case based on that.

Should SAB-121 be repealed, and what will be the impact on cryptocurrency custody?

Peirce: I think the SAB 121 release process was terrible. To me, it actually looks like a rulemaking that could be done with public input, perhaps with the FASB considering the issue rather than us. But anyway, we were supposed to have a public comment period, and we didn't. Attempts to overturn it were unsuccessful. But before attempts were made to overturn it, the scope of SAB 121 had been broadened. Initially it was targeted at public companies and then became available to broker-dealers. It has a lot of verbal guidance on what broker-dealers can and cannot do. Now we're hearing about other kinds of tweaks or changes, and it's all being done in a very opaque way. I don't see how this does people any good. We should follow the process. I am very disappointed with SAB 121 and I think we can do better and should do better.

One of the reasons I have been opposed to SAB 121 is that it takes the position that we don’t want experienced players custody of cryptocurrencies, which to me is a very strange and detrimental position to investor protection. So I welcome more people to enter and participate in the development of the hosting field. But this should be done in an orderly manner. I think having participants with experience in other fields involved in crypto is a positive development. Unfortunately, both at the SEC and elsewhere in government, the government often attempts to expel unpopular players who are interested in participating. So this is indeed a potentially positive development. I would like to see more players enter the custody and crypto space.

FIT-21 determines that Congress can draw the boundaries of cryptocurrency. Are you proud or worried about the regulatory direction you are seeing so far?

Peirce: I think it would be good for Congress to take the time to think about these very difficult issues (drawing the lines of cryptocurrencies that are and are not allowed in the U.S.) where we could have taken a more aggressive stance in the regulatory space, Congress Trying to provide some guidance. I think it's a positive step for the United States to have real conversations around these issues and try to find the right solutions.

But I think we're still in a not-so-good position on the regulatory side because we're still driving policy through enforcement, and that's not the way policy should be driven. It should be about thinking about a regulatory framework and starting from there, and then using enforcement to deal with the fraud problem.

Another area I’ve been working hard to promote is the global stablecoin space around cross-border payments and tokenization on the blockchain. I think the United States may not be at the forefront of this path, and it's a good lesson for us to see how other countries are trying to set up an environment where people can conduct these experiments. I still think we can achieve this through some rules or a sandbox trial framework. Because the rest of the world does. I don’t want us to fall behind. I think we have a strong capacity in the United States to try these experiments, so I hope we can do the same at some point.

Has the culture within the SEC changed? Are you optimistic about the future direction of regulation?

Peirce: Culture change requires some proactive steps, working with people and providing guidance. I am optimistic about regulatory culture changes in the future because I see people looking for positive ways to interact with the industry. Ensuring the vitality of the industry is very important to us and is one of my priorities.

If you became SEC Chairman, what would be your highest priority?

Peirce: Ensure the vitality of the industry, allow investors to make their own decisions, and ensure we do not create unnecessary barriers in rulemaking.

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