Emily Walker
The cryptocurrency market has experienced significant growth following Donald Trump’s election as the President of the United States. In recent days, optimism surrounding the new pro-industry administration has increased, as a more defined regulatory environment appears possible.
Despite this optimism, some critics argue that the Securities and Exchange Commission (SEC) still has work to do in creating a more welcoming regulatory landscape for the industry.
Need for Clear Regulation Rather Than Enforcement
SEC Commissioner Hester Peirce recently appeared on the Block and Order podcast to discuss potential changes within the agency as a crypto-friendly administration prepares to take office in 2025.
Trump’s recent victory over Vice President Kamala Harris has raised hopes for an approach conducive to cryptocurrency growth. During his campaign, Trump indicated intentions to overhaul the SEC by removing Chairperson Gary Gensler and establishing the US as the leading hub for cryptocurrency.
The president-elect has also committed to safeguarding the nation’s Bitcoin (BTC) holdings while collaborating with industry specialists to create a supportive regulatory framework for digital assets.
However, the SEC has a history of being aggressive towards the crypto sector, employing a model of “regulation by enforcement.” Commissioner Peirce pointed out that there are far more effective ways for the SEC to allocate its time and resources than constantly pursuing enforcement actions.
According to Peirce, a better path involves creating a regulatory structure in partnership with industry participants and investors. She believes that a reliance on enforcement only leads to uncertainty and a discouraging atmosphere for innovators. She went on to propose developing a clear set of guidelines and a “disclosure framework” that could help investors comprehend the risks and merits of potential projects.
Is the SEC Ready for a More Supportive Administration?
Peirce acknowledged that the current SEC stance has fostered confusion, making it challenging for investors and creating apprehension among crypto businesses looking to operate in the US:
This shouldn’t be the case. Although we will have regulations, no one should feel they cannot start or conduct business here due to uncertainty about the rules.
The podcast hosts mentioned that establishing a new regulatory framework in the US could take considerable time. Nevertheless, Peirce emphasized that the US could benefit from examples of effective regulations used elsewhere.
She expressed a need for the SEC to expedite its review procedures and cultivate an open-minded attitude. Peirce voiced some initial concerns about the incoming administration when the interview took place, suggesting that there was still uncertainty regarding their approach.
Peirce believes that having solid proposals ready for the new administration will be crucial. She also indicated in a post on X that stakeholders both within and outside the SEC should begin thinking now about what effective cryptocurrency regulation might look like.
Ultimately, Peirce contends that “good ideas are essential to inspire public debate” to help both the new administration and US regulators adjust to a potentially different regulatory mindset.