SEC Commissioner Hester Peirce shares her thoughts on cryptocurrency regulation, the Bitcoin ETF approval process, market futures, and future regulatory directions in an interview with Coinage’s Zack Guzman. 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.
Ethereum ETF Approval Without Committee Vote, What’s Really Behind It?
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. And then applying the same logic, we really don't have much choice in approving these ETPs.
What is the difference between a Bitcoin ETF and an 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're all going to come online and everyone knows they're going to come online at the same time and there's so much anticipation around it. While there are expectations surrounding Ethereum ETFs, what we are seeing is an iterative process where they are approved on the trading and market side and then still need to go through the corporate finance process, which is what is happening now. So I think the atmosphere around the Ethereum 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: I'm not commenting on what happened between staff and publishers regarding Staking being moved out of the application. However, I think that products with certain functions, such as staking or other functions, can always be reconsidered.
Does a Solana ETF application require a futures market to be approved?
Peirce: I'm a little hesitant to comment on these applications because they're before 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 the precedent of previous ETPs, not just crypto ETPs but other kinds of ETPs, and make a 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 whether 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 process by which SAB 121 was released 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, 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've been opposed to SAB 121 is that it takes a position that we don't want experienced players hosting 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 industry. But this should be done in an orderly manner. I think having players with experience from other industries 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 industry.
FIT-21 determines that Congress can draw the boundaries of cryptocurrencies, 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 what cryptocurrencies are and are not allowed in the United States) that we could have taken a more aggressive stance on regulating the industry that Congress is 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 not in a 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 structure and starting from there, and then using enforcement to deal with the fraud problem.
Another industry I've been working hard to promote is the global stablecoin industry 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 create an environment where people can conduct these experiments. I still think we can achieve this with some rules or a sandbox trial architecture. 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 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 that we do not create unnecessary obstacles in the formulation of rules.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: "PANews"
Original author: Zack Guzman
Compiled by: Wu Shuo Blockchain
