United States Securities and Exchange Commissioner Hester Peirce, popularly known in the crypto community as “CryptoMom,” has offered hopeful remarks on the prospects of a Bitcoin ETF.
Pierce made her latest statement on the ETF at a speech at the University of Missouri School of Law. Her remarks follow that of fellow commissioner Robert Jackson Jr., who said in an interview with Roll Call that a Bitcoin ETF would happen “eventually.”
Peirce stands out as a supporter of blockchain and Bitcoin, previously offering some forward-thinking views on digital assets and how they can benefit the economy. She diverged from her fellow commissioners’ views on Bitcoin ETFs, saying that while the possibilities that investors see in crypto must be tempered with caution, it would not do to be over-cautious either.
As I have mentioned in the past, I am concerned that our approach with respect to such products borders on merit-based regulation, which means that we are substituting our own judgment for that of potential investors in these products. We rightfully fault investors for jumping blindly at anything labeled crypto, but at times we seem to be equally impulsive in running away from anything labeled crypto. We owe it to investors to be careful, but we also owe it to them not to define their investment universe with our preferences.
Pierce also believes that exchange regulation should become an important aspect of the SEC’s agenda — it was made public earlier this year that cryptocurrencies would be a priority for 2019 — and that regulation in this regard would help the body understand the space better:
Closely linked to the question of whether tokens are securities is the question of how the platforms on which tokens trade should be regulated. Some of these platforms want to register with us, and I am eager to make progress on this front. There are features of crypto trading platforms that may differ from exchanges or alternative trading systems designed for traditional securities. To identify how regulation may need to change to accommodate these differences we will need to improve our understanding of how the platforms operate.
SEC Getting More Involved with Cryptocurrency
Earlier last year, several entities submitted applications for a Bitcoin ETF but none were approved.
The CBOE-backed proposal had withdrawn its request for a rule change, instead choosing to discuss the matter with SEC before proceeding. Similarly, a Winklevoss-backed ETF was also rejected. Peirce believed that the rule change proposed by the Winklevoss ETF matched the standards set by the SEC.
SEC Chairman Jay Clayton, while on the whole quite optimistic about digital assets, is wary of a Bitcoin ETF until and after market manipulation has been addressed in the space — something that has been a longstanding concern.
That said, the regulatory body is now speeding up its examination of the crypto space. With clearer regulation and increasing chances of an ETF approval, the SEC does appear to be focusing on allowing for more innovation. It has also set up a new internal division called FinHub to support the industry.
