Securities and Exchange Commission member Hester Peirce said on July 21 that Congress ought to weigh in on regulatory jurisdictions that should apply to various types of cryptocurrencies and other digital assets, and said those jurisdictions might vary depending on the different attributes of some digital assets.
Speaking at the MerITocracy American Innovation Forum, Peirce talked about the continuing – and sometimes rancorous – debate on the future of digital asset regulation. That debate has involved arriving at definitions of digital assets, and the potential jurisdictions of Federal regulators including the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), and the Federal Trade Commission.
At the same time, Congress is taking steps toward through several legislative efforts in the House and Senate to sort out digital assets regulatory jurisdictions, and the Biden administration has several Federal agencies also working on the same set of issues through an executive order issued earlier this year.
“I think certainly it would be helpful if Congress weighed in” in that debate, said Commissioner Peirce.
“Crypto is a big topic, and I think much of crypto will end up blending into other things we do as a society, whether that’s finance, securities, or social networks or other aspects of society,” she said. “I think that crypto will have applications in many different spaces, so it’s hard to just write a broad piece of legislation for crypto generally,” Commissioner Peirce said.
“But there are certain aspects I think that we can address,” she said, pointing to “stable coins” whose value is pegged to another asset class such as cryptocurrency, fiat money, or exchange-traded commodities. “You could you could write a legislative framework to say we want them to be regulated by these entities – maybe the banking regulators, maybe the SEC, or maybe a combination.”
“You could do the same thing with crypto assets,” Commissioner Peirce said. “Congress could try to put a framework around how to decide whether something falls within the SEC’s jurisdiction, or the CFTC’s.”
“I will say that I think the SEC could be quite a naturally good regulator in this space for things like a trading platform that trades crypto assets,” she continued. “Would I in my ideal world have a Federal regulator in that space? Maybe not, but I think a lot of other people think that that’s necessary.”
“If you’re going to have one, I think we can make a credible case that the SEC would be good at that,” Commissioner Peirce said. “We’re used to dealing with retail folks, [and] we are used to thinking about how trading platforms work, so in some ways, I think we have we have a real natural spot.”
“But there are also going to be areas where we have to deviate a bit from the way we’ve done things in the past,” she said. “And the question is, are we capable of setting out what our objectives are achieving those objectives but still allowing some of the flexibility?”