Gensler confirmation as SEC chair would be good for crypto, says Hester Peirce
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Hester Pierce of the U.S. Securities and Exchange Commission is known as a regulator who consistently champions digital assets, so much so that her mother became a cryptographer.
In a new interview with the Thinking Crypto podcast, Pierce looks at the U.S. regulatory approach to the asset class today, saying I think we missed the boat a little bit on the crypto front. And I think a lot of that has to do with the fact that our rules are not clear. Contrary to the persistent narrative that cryptocurrencies are somehow inextricably linked to illegality and a desire to cheat the system, she said that, in her own experience, participants in the industry want to play by the rules but often struggle to do so due to a lack of proper guidance:
Am I optimistic that we will finally see more clearly? I think we have a good chance. We’re probably going to have a new president, Gary Gensler, who has a hearing before the Senate. This is a step in the process. Then he should vote. And if he is confirmed and comes to the SEC, he brings with him a very thorough knowledge of this asset class.
The Senate Banking Committee approved Gensler’s nomination by a 14-10 vote, after two Republicans joined 12 Democrats in supporting the choice.
Pierce pointed to Gensler’s recent experience teaching courses on blockchain at MIT, noting that he is surrounded by people who are enthusiastic about the technology. She said Gensler recognizes the positive potential of the sector, but also the need for more clarity to facilitate its development. Not convincing him would help a lot, she said.
Pierce noted, however, that while the chairman sets the agency’s agenda and, in Gensler’s case, can be expected to support a more efficient approach to crypto regulation, there is a significant degree of continuity in the SEC’s day-to-day work in its interactions with the crypto industry, regardless of who is chairman:
The purpose of the five-member commission is to provide continuity over time so that there are no major political swings…so it’s important that people know that the work of the commission…[will not] change dramatically when a new chair is appointed. The regulatory agenda may change somewhat, but the Commission’s work, [its] day-to-day work […] will continue, whoever the President is.
In that spirit of cautious optimism, Pearce also good-humouredly commented on her pet name in the US crypto space, saying: You know, I’ve always loved the idea of being a mother, and I’m not a mother in the real world. So being a mother in a virtual world is not bad at all. However, she quickly defended herself against the unintended consequences, noting:
I think it’s very important to say: No, the regulators can’t be your parents. They won’t make decisions for you and they won’t bail you out if you have problems.
Ms Pearce emphasised that she is not advocating a particular asset class, but rather I am advocating that people can invest in the asset classes they find useful to achieve their ultimate goals. When she discovered bitcoin (BTC) while working at George Mason, she said she strongly believed in the power of decentralization and that cryptocurrencies were a perfect fit.