CRYPTO’S CROSSROADS: REGULATION & INNOVATION WITH SEC COMMISSIONER HESTER PEIRCE
CRYPTO’S CROSSROADS: REGULATION & INNOVATION WITH SEC COMMISSIONER HESTER PEIRCE
August 06, 2025
For today’s show, we have the perfect guest at the perfect time. We’re talking with Hester Peirce, the SEC commissioner who is leading that agency’s task force on digital assets – known at the SEC as Project Crypto. She and I sat down together at the SEC last week, just one day after the White House issued its paper on the administration’s policies on digital assets and crypto.
Sitting in the Commission’s conference room looking out at the Capitol Dome, we had a chance to explore both the very active policy landscape on these issues in the U.S. and, more deeply, what it all means.
Our conversation today covers the updates and outlooks for these developments. Beyond that, the Commissioner talks about what the administration and Congress are aiming to accomplish. Blockchain technology has the potential to remake large swaths of financial activity – for the better. It can strip out costs, friction, and delays, all of which are substantial in today’s systems due to the combination of legacy technology and the need, currently, to rely on financial intermediaries to provide the trust factor needed by the parties to any given transaction. If the trust can be architected into the system – programmed into it, since crypto technology has made money programmable – a lot of good things can happen. Stablecoins are an exciting new opportunity on the payments side (we will be doing several upcoming shows on them, and also holding a roundtable in Washington next month). On the investment side, Congress and the agencies are taking steps to create a reliable regulatory framework without which, again, the industry won’t be able to develop its potential.
The U.S. has been slower than many other countries to formalize a regulatory approach to digital assets, but is now undertaking major legislative steps. Congress just enacted the GENIUS Act on stablecoin regulation, and the House of Representatives has now passed the STABLE Act, which aims to set up a clarified regulatory framework for digital assets and cryptocurrency, including laying out the respective roles of the SEC – the Securities and Exchange Commission – and the Commodity Futures Trading Commission, or CFTC. The Senate is now working on its version of that bill. Notably, both of these legislative efforts have bipartisan sponsorship and support. They are complex and controversial, yes, but there is growing consensus that crypto is here to stay and that it’s time to create clear regulatory rules of the road, both to prevent harmful activity and to provide the industry with the certainty that is essential to healthy growth.
At the same time, as everyone knows, these innovations come with many new and/or heightened risks. In our conversation, we talk about the dangers of expanded financial crime – money laundering, fraud, and scams – all of which are already skyrocketing due to the advent of generative AI, in both crypto and tradfi.
We also talk about the very real risks to investors and the need for investor education. This is one of the things that interests me the most about crypto – its potential to expand financial inclusion by opening wealth-building opportunities to people who don’t already have wealth, especially now that so many people are learning about investing through online “finfluencers.” There is a huge opportunity in the very fact that today, more and more people are actively interested not just in spending money, but in investing to earn more of it. I can’t recall any time in the past where this has been so true – where planning our financial lives has merged into pop culture and actively engaged millions of people. It’s a phenomenon that opens the door to tremendous possibilities to solve long-standing, intractable consumer and economic problems, such as excessive consumer debt, low rates of saving, insufficient retirement savings, and many more. But it also brings risks that people will hear the wrong advice and make wrong decisions. It’s the job of the SEC, and also FINRA, for which I have served on an advisory committee, to help people understand their choices. Commission Peirce makes the powerful point that to do this well, today, will require more than just telling people to read “stacks of paper.” We’re in a whole new world of money, in more ways than one.
She also talks eloquently about the need to create regulatory environments that allow markets to innovate. I recently spoke at a regulatory agency event where, in answering a question, I found myself urging that we consider amending the mandates of our financial regulatory agencies to include this factor. As regular listeners know, I’m a former bank regulator. I deeply appreciate the need for government to help keep financial markets fair and safe. But in this age of technological transformation, regulators should also seek to enable financial consumers and investors to reap the benefits of tech innovation, much like we expect drug regulators to enable people to benefit from new medicines and medical treatments as research and invention makes them possible.
I wrote a blog post in 2014 titled The Benefits of Bitcoin. That was only about five years after Bitcoin’s launch – and a year before the introduction of Ethereum. At the time, crypto was largely viewed as an exotic novelty, appealing only to enthusiasts (and criminals). Even then, though, you could imagine the value of being able to make money function more efficiently. Crypto has had a tumultuous journey in the eleven years since then, but today, it stands at the threshold of being a mainstream, well-regulated element of the global financial system. There is a lot of work ahead, and a lot of possibility.
Hester Peirce has served as a Commissioner of the United States Securities and Exchange Commission since January 11, 2018. Her appointment brought her back to the Commission, where, early in her career, she served as a staff member in the Division of Investment Management and later as Counsel to Commissioner Paul Atkins.
Immediately before her appointment, Commissioner Peirce conducted research on the regulation of financial markets at the Mercatus Center at George Mason University. She also has served as Senior Counsel on the Senate Committee on Banking, Housing, and Urban Affairs, where she advised Ranking Member Senator Richard Shelby and other members of the Committee on securities issues.
Commissioner Peirce is leading the Commission’s Crypto Task Force.
More for our Listeners
Upcoming Podcasts
We have wonderful upcoming episodes. We’ll have a conversation with Sean Neville, co-founder of Circle and now founder of Catena Labs. We’ll have a discussion with Saket Narayan of AWS about how to modernize the regulators’ own technology. We’ll have a show with Carole House and Amanda Wick on financial crime. And much more!
AIR Events
Calling all Regulators / Meet in London: We are excited to be offering a four day learning program in London in October, inviting regulators and central banks from around the world. The program shares AIR’s Innovation Elements methodology that regulators can use to build your innovation capabilities.
Stablecoin Roundtable: On September 16 in Washington, D.C., we’re hosting an exclusive, closed-door roundtable on stablecoins. Attendance will be limited but if you’re interested in receiving an invitation, let us know.
We have also posted a video from our June Battlefront exercise on AI and Fraud. Please check it out.
Upcoming Speaking Events by AIR’s team
I’m looking forward to speaking at the National Foundation for Credit Counseling’s annual conference, in Washington this month, on generative AI. And I’ll be at Money 2020 in the fall in Las Vegas, doing a fireside chat with Rodney Hood, former Acting Comptroller of the Currency.
