- SEC Commissioner Hester Peirce argues regulators should avoid micromanaging markets and consider simplifying disclosure rules.
- Peirce suggests blockchain-based tokenized securities could reduce the need for traditional intermediaries and enable faster settlement.
- The SEC has shown growing interest in tokenization, issuing a no-action letter to the Depository Trust & Clearing Corporation (DTCC) to explore a blockchain-based service.
In a Thursday speech to the SEC’s Investor Advisory Committee, Commissioner Hester Peirce warned that overly prescriptive rules can distort capital flows in financial markets. She argued regulators should exercise restraint when shaping market outcomes, citing the economist Adam Smith.
Peirce stated that public companies often spend excessive time preparing mandated disclosures that may obscure information for investors. Consequently, she suggested the SEC should consider streamlining its disclosure requirements.
The speech, available online, also addressed the growing debate around tokenized securities and blockchain-based financial infrastructure. Peirce noted that SEC staff continue to work on a potential “innovation exemption” for limited experimentation.
She questioned whether additional disclosure and intermediary requirements would be necessary for tokenized securities. Peirce observed that blockchain systems could enable faster settlement and, in some cases, transactions without traditional intermediaries.
Tokenized securities have become a prominent topic, with SEC Chair Paul Atkins previously calling tokenization a major financial “innovation.” Meanwhile, the agency issued a no-action letter to DTCC in December, allowing it to explore a blockchain-based tokenization service.
The regulatory discussions unfold alongside broader policy debates in Washington over crypto market-structure legislation. This could eventually shape how digital assets are overseen in the United States.
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