Hester Peirce: The Positive Future of Digital Asset Regulation (Huge Catalysts Coming)

**Hester Peirce** (0:00)
I'm gonna start with my disclaimer, which is that my views are my own views as a commissioner, not necessarily those of the SEC or my fellow commissioners. I think we really do need to switch the framing to say that it is natural, as you said.
We should expect people to want to protect their privacy. When I just look across the landscape of assets, I come to a very different conclusion than some others at the SEC in the past have come to. Tokenization is one of those areas that, since the administration changed, and since the attitude toward crypto and blockchain change, people have come to us and they said, we really think tokenization has potential here.

**Robbie Klages** (0:37)
Good morning, ladies and gentlemen. We are back at The Rollup, and today we've got Commissioner Peirce of the SEC joining us today amidst the innovation exemption happening in the digital assets world. We're going to be getting into all of this as well as what is going on with Project Crypto and the Crypto Task Force at the SEC. Commissioner Peirce, thank you so much for joining.

**Hester Peirce** (1:00)
Thanks, Robby. It's great to be with you. I of course have to give you my disclaimer, which is that my views are my own views as a commissioner, not necessarily those of the SEC or my fellow commissioners.

**Robbie Klages** (1:09)
I can tell you've practiced that once or twice. So thank you for sharing that.
It feels like it's been a whirlwind. I mean, things are happening day in and day out. We're not going to be talking about prices. People like to talk about those quite a bit. We don't need to cover anything about that. There's so much happening underneath the surface that I want to get into, and I want to chat about with you because you have such a unique perspective as commissioner of the SEC. Maybe you can just, before we get into some of the nuts and bolts, you can just talk us through what has been the recent weeks and months. What are you most excited about? We hear all of these things about tokenized equities. We hear tokenized deposits.
We're recording this during the SpaceX IPO. So, there's tons happening both on-chain and off-chain. Maybe you can just give us a little bit of insight into what have been the recent happenings at the ICC in the last couple of months.

**Hester Peirce** (2:04)
Well, we've been busy, and I think one of the most exciting projects we're working on is thinking about how we can make it more likely that more companies will go public earlier in their lives. And so, that's a project that has many different pieces to it, but that's something we're working on. Just yesterday, we proposed a rule that would eliminate the Rule 611, which is the trade through rule in equity markets. And that is a 20-year-old rule that I think was really ripe for reconsideration. So I'm excited about that. There's obviously a lot going on on the crypto side.
Some of it within the SEC, some of it outside. I mean, I'm excited to see clarity move forward.
And I think that will give us a lot of work to do. I won't be here to do it. So maybe that's why I'm excited about it. But I think it will be quite helpful for the industry to have this legislative framework within which we and the CFTC are writing rules.

**Robbie Klages** (3:06)
Yep. And I think that is a great place to start with the recent 6.11 proposal to remove that piece of regulation.
I was reading a thread about this just a little while ago. And it turns out that, I guess, Chairman Atkins, this has kind of been 20 years in the making.
In 2005, Chairman Atkins and Commissioner Cynthia Glassman issued a 44-page written dissent on this vote that put 6.11 into place. And so why don't we start here? There's ways in which this is protecting the national best bid and offer as it pertains to trading. Some of these are fundamentally, essentially impossible with some of the AMM technical structures that are available with exchanges on chain. And so it feels like this piece of regulation is a bit antiquated. But before we draw that conclusion, could you describe to us what rule 6.11 is? And then we can get into, you know, whether it makes sense or doesn't make sense in the digital on-chain age.

**Hester Peirce** (4:09)
Yeah, I mean, the rule came from the concern that there were different marketplaces that were not being united. And so you might not be getting the price that you could get if you were trading at some other venue. And so the idea is that in order for a trade to go through, it has to either be at the national best bidder offer. So that's like the best price that's out there or you have to improve on it. So otherwise, it has to, it can't, that trade can't go through.