60 - The SEC and DeFi | Hester Peirce
Bankless Fan and SEC Commissioner Hester Peirce comes on the podcast to discuss tokens, DeFi, 'self-driving banks,' and regulation.
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Bankless Podcast #60 - SEC & DeFi
Guest: Hester Peirce
Hester Peirce is one of five SEC Commissioners and has been a knowledgable advocate for crypto as the world works out how to regulate the budding industry. The main goals of the Security & Exchange Commission are threefold – to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC governs far more than crypto, but increasing attention is coming to the space as capital gravitates into it.
Regulating crypto begins with officially establishing the asset class, e.g. currencies, capital assets, commodities, equities, et al. The next step is giving these assets legitimacy in existing financial institutions through exchange-traded products like a Bitcoin ETF.
Below the base money layer, there exists Layer 0, the social layer. Layer 0 must be willing to officially play ball with the cryptoeconomy, and that's what makes regulators like Hester so important. The net optimization of these layers makes for an unequivocally better society: a more inclusive, equitable, and efficient one.
Hester believes in governing principles, not specific technologies. It's important here to remember the three main goals of the SEC. The value propositions of crypto – providing a permissionless, trustless, and verifiable means to transact – are in accord with the values of a free state. The role of government is to encourage and protect mutually beneficial, voluntary engagement among citizens.
Although the harmony between crypto's core values and those of a free state are readily apparent to a seasoned Bankless listener, the rest of Layer 0 must still be convinced. Crypto is a frontier with infinite possibilities, and effectively regulating such an ecosystem is a massive task. However, based on this conversation, there seem to be many reasons to be optimistic about the future of Crypto & DeFi regulation.
Topics Covered:
0:00 Intro
4:57 Crypto Mom
10:14 Regulating Principles
14:07 🚀 Atomic Trading 🚀
17:59 Dormant Potential
21:16 Benefits of Good Regulation
24:17 Challenges of DeFi
27:13 Understanding Principles
32:01 The DeFi Mullet & Other Narratives
36:47 What is the SEC?
45:12 What Needs to Change?
49:22 A Safe Harbor for Launches
54:38 Good Regulations So Far?
59:03 Easier Than 2017?
1:03:38 Regulatory Clarity and Tokens
1:05:19 Expressing Decentralized Power
1:09:40 Moving Faster and Faster
1:11:12 NFTs and Capital Assets
1:15:34 Racing Against Innovation
1:18:38 Let the Experiment Run
1:22:25 When Bitcoin ETF?
1:25:21 Protecting the Dollar
1:27:55 Optimism for 2021 and Beyond
1:32:04 Closing & Disclaimers
Resources:
🚀 Atomic Trading 🚀
https://www.sec.gov/news/speech/peirce-atomic-trading-2021-02-22
Get Ready For Self-Driving Banks
https://www.ft.com/content/c1caca5b-01f7-41be-85a4-3ecb883f2417
Gary Gensler MIT Crypto Course
https://youtube.com/playlist?list=PLUl4u3cNGP63UUkfL0onkxF6MYgVa04Fn
Hester on Twitter:
https://twitter.com/HesterPeirce?s=20
This Week on Bankless:
🧢 Weekly Action Recap (4/10): https://newsletter.banklesshq.com/p/the-coinbase-tsunami-weekly-recap
🗞️ Weekly Rollup (4/9): https://shows.banklesshq.com/p/-rollup-coinbase-ipo-fei-protocol
🏴 dYdX & StarkWare (4/6): https://shows.banklesshq.com/p/sotn-41-scaling-defi-with-dydx-and
⚒️ How to Crypto Tax (4/6): https://newsletter.banklesshq.com/p/how-to-do-crypto-taxes-for-the-lazy
Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Do your own research.
Disclaimer: The views expressed in the episode are those of Hester Peirce, not the SEC nor any of her fellow commissioners.
Disclosure: From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here:
https://newsletter.banklesshq.com/p/bankless-disclosures