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Hester Peirce, Commissioner of the United States Securities and Exchange Commission (SEC), has emphasized the need for greater decentralization in the U.S. financial system, calling for a more lenient approach to cryptocurrency regulation and enforcement.
Known colloquially as “Crypto Mom,” Peirce expressed her views during a fireside chat with CNBC’s MacKenzie Sigalos at the ETHDenver conference on Feb. 29. She asserted that decentralization could bring resilience and strength to the financial system, contrasting it with the concentrated risks associated with centralization. Peirce stated, “Decentralization can actually bring resilience and strength to the financial system. So, I’d love to see more resilience and strength … points of centralization always keep me up at night.”
Peirce, appointed to the SEC by former President Donald Trump in 2018, has been a vocal supporter of the cryptocurrency industry and has consistently opposed excessive regulation of digital assets.
Addressing proposed legislation that classifies decentralized technologies like network nodes, validators, noncustodial wallets, mining pools, and blockchain software as financial institutions, Peirce expressed concern, highlighting the existing confusion over registration requirements.
Regarding the broker/dealer rule and its potential impact on decentralized finance (DeFi), decentralized exchanges, and developers, Peirce noted the challenge the SEC faces when dealing with decentralized systems. She emphasized that the concept of decentralization contrasts with the SEC’s traditional framework, particularly when individuals interact with code instead of a centralized entity.
Peirce clarified the SEC’s role, stating that their focus is on identifying areas where securities laws are implicated, ensuring appropriate disclosure, and allowing individuals to make informed decisions. The SEC adopted rules on Feb. 6 to increase oversight of DeFi by requiring more market participants to register and comply with federal securities laws.
Peirce concluded by stating that while the SEC is currently in “enforcement only mode,” there should be provisions allowing projects to evolve and achieve decentralization without the constant threat of legal action. She emphasized the importance of providing clear rules for the crypto space and avoiding punitive measures against those seeking guidance.
The discussion also covered various crypto-related topics, including the agency’s future post the U.S. presidential election, spot Bitcoin exchange-traded funds, and central bank digital currencies, along with concerns related to state financial surveillance.
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