SEC Commissioner Peirce makes case for financial privacy, says tokenization is a 'huge focus now'
Quick Take SEC Commissioner Hester Peirce said tokenization is a “huge focus now” for the agency. On Thursday, during the DC Privacy Summit, Peirce also spoke about the need for privacy.
The Securities and Exchange Commission's Hester Peirce, along with the agency itself, has a lot on their plate, with, of course, cryptocurrency being a priority.
Speaking after a panel on privacy on Thursday at the DC Privacy Summit, SEC Commissioner Hester Peirce, a Republican, said the agency was focused on many different areas, including rules for distributing tokens, guidance on when something constitutes a transaction, and issues surrounding crypto custody. The agency, she said, is working with Congress as it drafts bills to regulate the digital asset industry at large.
Peirce also said tokenization is a "huge focus now" for the SEC. Tokenization has taken off with full force as firms look to bring stocks onchain. Last month, Nasdaq asked the SEC to allow it to trade tokenized securities.
However, that's all on pause now as the U.S. government enters into its second week of a shutdown after Congress failed to reach a deal on funding, furloughing employees and significantly limiting what federal agencies can do. The shutdown occurred just as multiple crypto exchange-traded funds were primed to get the SEC's sign off.
"Pretty much nothing is getting done," Peirce said when asked by The Block about the shutdown and ETFs.
Since the start of a new presidential administration, the SEC has taken a starkly different path toward crypto than the Biden administration. Former SEC Chair Gary Gensler had called on crypto firms to register with the agency and said that most cryptocurrencies are securities, suing several entities in the process. Since then, the securities watchdog has held roundtables as part of its new Crypto Task Force, embarked on " Project Crypto, " and dropped numerous investigations.
Privacy
On Thursday, during the DC Privacy Summit, Peirce also spoke about the need for privacy. In August, Peirce made the case for financial privacy in a speech and called on the government to "guard zealously people’s right to live private lives." Throughout that speech, Peirce turned to the Fourth Amendment, which protects people from unreasonable government searches, safeguarding personal privacy.
"We also don't want to live in a world where the government has information," Peirce said on Thursday. "I mean we've seen what can happen in lots of places where government power can be used in a way that's not good. So we do need to be thinking about protecting ourselves."
Crypto could be the doorway to rethink provisions under the Bank Secrecy Act as well as anti-money laundering (AML) and know-your-customer (KYC) rules, she said.
"I actually am optimistic because I think crypto has raised a lot of these questions again, because we're trying to figure out — how do you smash a Bank Secrecy Act, AML, KYC framework on top of something that has such a peer-to-peer element to it," Peirce said. "So I think it really affords us an opportunity to rethink the whole thing."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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