Hester Peirce, one of the five commissioners of the U.S. Securities and Exchange Commission (SEC), has expressed her frustration over the regulator’s repeated rejections of bitcoin exchange-traded fund (ETF) applications. Peirce, who is known as “Crypto Mom” for her pro-crypto stance, said that the SEC should have approved a bitcoin ETF a long time ago.
“I’ve been thinking we should approve one for the last five years,” Peirce said in a MarketWatch virtual panel discussion on Wednesday. “The logic for why we haven’t has always mystified me.”
Peirce argued that it is not the SEC’s job to approve or reject applications based on the merits of the underlying investment itself. Rather, the SEC should focus on whether the product meets the standards of the securities laws, such as disclosure, liquidity, and custody.
“I think people make their own decisions about whether they want to buy or sell something,” Peirce said. “Our role is to provide a well-lit space where people can make those decisions.”
Bitcoin ETFs Approved Elsewhere
While the U.S. has yet to greenlight a bitcoin ETF, several other countries have already done so. Canada, for instance, has approved several bitcoin and crypto ETFs this year, attracting billions of dollars in assets under management. Brazil, Germany, Switzerland, and Sweden have also listed bitcoin and crypto ETFs on their exchanges.
Peirce said that the U.S. is falling behind the rest of the world in terms of crypto regulation and innovation. She said that the SEC needs to provide more clarity and guidance for the crypto industry, especially on the status of tokens and the application of securities laws.
“We’ve been very slow in giving guidance. It’s not the SEC’s strong suit,” Peirce said. “I think we need to do a better job.”
New SEC Chair Brings Hope
Peirce also expressed her hope that the new SEC chair, Gary Gensler, will bring a more positive and productive approach to crypto regulation. Gensler, who was confirmed by the Senate last month, is a former MIT professor who taught courses on blockchain and digital currencies. He is also a former chairman of the Commodity Futures Trading Commission (CFTC), where he oversaw the launch of bitcoin futures contracts in 2017.
“I’m optimistic that he has an interest in this space, and that he understands the need to provide clarity,” Peirce said. “I’m hopeful that we can work together on that.”
Peirce also said that she is looking forward to working with her fellow commissioners, including the newly appointed Caroline Crenshaw, who joined the SEC in August 2020. Peirce said that she hopes to persuade them of the benefits of crypto and the need for a more open-minded regulatory approach.
“I think we have a lot of education to do at the SEC among all of us,” Peirce said. “I think there’s a lot of interest and a lot of willingness to learn, and so I’m hopeful that we can make some progress.”