'Right the ship'

The narrative

U.S. Securities and Exchange Commissioner Hester Peirce, the newly named head of the regulator’s crypto task force, has long been a proponent of the crypto industry as one of the Republicans overseeing the federal securities regulator. She discussed her approach to the industry and the role of the SEC more broadly with CoinDesk in late February.

Peirce, known in the industry as "Crypto Mom," is viewed as one of the more optimistic regulators on the potential of crypto to benefit the public. She's also been a vocal critic of the SEC's handling of the space, which she's said has been focused on threats of enforcement rather than providing clear guidance to the industry.

The commissioner's thoughts are particularly relevant now as the SEC faces increasing pressure to adapt to the rapid development of the crypto sector. The agency has come under fire from lawmakers in both parties for what they view as a slow and clumsy response to the rise of digital assets.

In January, SEC Chair Gary Gensler claimed that the SEC already has the authority to oversee the crypto industry and that Congress’s involvement is not necessary. However, both the House and Senate are actively working on legislation that would provide the SEC with more explicit jurisdiction over crypto.

The House Financial Services Committee is expected to vote on a comprehensive bill that would create a legal framework for digital assets, potentially covering topics such as stablecoins, trading platforms and blockchain technology. The Senate Banking Committee is focusing on a bill that would regulate stablecoins and create a clear path for registering crypto tokens as securities.

The administration is also engaging with crypto issues. In February, President Donald Trump held a cryptocurrency summit at the White House to discuss the role of digital assets in the U.S. financial system. The meeting brought together key administration officials, members of Congress and representatives from the crypto industry to discuss the opportunities and challenges posed by cryptocurrencies and blockchain technology.

The administration is considering ways to foster innovation in the crypto sector while ensuring investor protection and financial stability. The administration is also interested in exploring how cryptocurrencies could be used to promote U.S. economic interests in the face of competition from China, which has been investing heavily in digital technologies.

As the legal and political landscape evolves, the actions and pronouncements of the SEC commissioners will be closely watched by industry participants and policymakers alike. The commissioners' views and the internal dynamics of the agency will play a crucial role in shaping the future of crypto regulation in the United States.

Here's an excerpt from the interview, which has been edited for clarity and brevity:

Nikilesh De: I was hoping we could begin with an overview of the last five weeks, in particular, with the new crypto task force that you're heading up. Of course, this is a topic that's very relevant to the people in our world.

So I'd love to hear about what you've seen, done and heard so far, and then where you expect this to go.

Hester Peirce: Sure. Well, let me start by giving you my standard disclaimer, which is that my views are my own views as a commissioner, not necessarily those of the SEC or my fellow commissioners.

But I think it has been an eventful five weeks, and I think it was great that Chairman [Mark] Uyeda decided to give us the ability to think about a lot of these issues in a holistic way. And so that's exactly what we're trying to do. I think we have been able to get a lot done already, which I'm happy about. It's a great team, a lot of really smart people who are working very hard.

And so I think the goal is to try to think about what we can just carve out and say to people, "this isn't in our jurisdiction." Congress, if you want to put it in our jurisdiction, that's fine, but it's not there. And then with the stuff that's in our jurisdiction, what can we do in the short term to provide some clarity or a path forward for people so that they're not feeling that they can't do anything out of fear that it might be within our space.

Let's provide some clear roads forward. Those might be temporary, just bridging the gap until there's legislation or regulation, and then trying to grapple with some of those longer term issues around tokenization of securities, around what does it look like for a broker dealer or a trading platform that's trying to have securities alongside non-securities. Some of those more difficult issues will take some time to grapple with, and we're trying to do all of this in a way that involves the public. We want people to be able to come in and talk to us. We want to get their suggestions for how to move forward and and and really get the best ideas and put those in place

De: Can you speak a bit to what you're hearing,