SEC Commissioner Hester M. Peirce called for improved coordination among international financial regulators to better facilitate blockchain technology and cryptocurrency innovation.
In a speech at the Singapore University of Social Sciences Convergence Forum, Ms. Peirce praised Singapore as the "global crypto-hub," and compared that nation's progress in cryptocurrency regulation to that of the United States. Ms. Peirce pointed out that the United States is still grappling with a less-than-mature cryptocurrency regulatory regime, with multiple regulators and a "nebulous" definition of what constitutes a security. She highlighted the difficulty faced by U.S. investors and firms regarding cross-border compliance, including the challenges of mismatched domestic and international regulations and the complexities of dealing with rules across multiple jurisdictions. In addition, she considered the question - answered differently by different countries - of whether a crypto asset constitutes a currency, commodity, security or derivative.
Ms. Peirce stated that she would like to see more "momentum" from the SEC toward finalizing digital assets-related rules. She outlined several steps taken so far by the SEC to achieve this, including:
establishing and understanding digital asset technology and markets;
creating the "strategic hub for innovation and financial technology" known as FinHub, which coordinates the SEC's approach to digital assets; and
providing guidance to the industry as to how token offerings can take place within the confines of the existing SEC regulatory framework.
Ms. Peirce noted that there is a clear connection between the "clarity" of Singapore's regulatory approach and the "leading role" that Singapore has played in the number of digital asset projects it has conducted. She stated that she was motivated by Singapore's approach in not treating every token offering as a securities offering, and added that she intends to support the establishment in the United States of a non-exclusive safe harbor for the offer and sale of certain tokens.
Commissioner Peirce's speech called out what many in the crypto industry have long known - that many cryptocurrency innovators are choosing jurisdictions other than the United States which have been better at getting their crypto regulatory houses in order. Ms. Peirce is not saying she has all the answers, and she is not saying that a single global regulatory regime is the solution. But she is elevating the discourse by suggesting regulatory constructs such as a token issuance safe harbor that would not "choke token networks" before they can even get off the ground. Ms. Peirce pointed to the Financial Stability Board and Organization for Economic Cooperation and Development as examples of global bodies that have helped move forward financial regulation, and urged cooperation and coordination to learn from efforts that have worked and those that have not. She continues to be both a leader and a beacon of open-mindedness in the crowded world of U.S. crypto regulators.
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