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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 and DeFi

Guest: Hester Peirce

April 13th, 2021

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 to succeed, 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.

Resources:

• 🚀 Atomic Trading 🚀

• Get Ready For Self-Driving Banks

• Gary Gensler MIT Crypto Course

• Hester on Twitter

THIS WEEK ON BANKLESS:

• 🧢 WEEKLY ACTION RECAP (4/10)

• 🗞️ WEEKLY ROLLUP (4/9)

• 🧠 THOUGHT THURSDAY | Decentralizing Venture Capital (4/8)

• ✏️ WRITER WEDNESDAY | Building a Decentralized Blackrock (4/7)

• 🏴 STATE OF THE NATION | dYdX & StarkWare (4/6)

• ⚒️ TACTIC TUESDAY | How to do Crypto Taxes for the Lazy (4/6)

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

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.