Hester Peirce, Commissioner of the American Securities and Exchange commission and head of the newly created cryptographic working group of the SEC, and Caroline Pham, acting president of the Commodity Futures Futures Trading Commission American, each spoke to Digital Assets Innovation Summit organized by City & Financial Global on July 2, 2025 in London.
Hester Peirce, dry
Peirce said it was very important for the regulator to work bilaterally with other multilateral jurisdictions and organizations. She added: “I suggested that we try to create a framework in which entities, people or projects trying to do things beyond borders in several jurisdictions, can test commercial viability.”
However, she continued that she did not want to put much work in something that will not be used, so it will depend on demand.
International tests would allow regulators to share information, to share how projects work well and to learn the lessons on what a regulatory regime should look like Peirce. In addition, she said that a key characteristic that would be necessary is a deactivated ramp to allow successful projects to pass tests on the market.
“It is difficult to work in a single jurisdiction, but it is important for us to try because it is a cross-border industry,” she added. “I do not think it is a zero -sum game because we all benefit from dynamic dynamic and competitive savings, so we should work together.”
Pham added that it had suggested a pilot program on digital asset markets in 2023 and that the CFTC has succeeded in pilots since the 1990s.
“Pilots are not limited to the United States, so they would be open to participants from all countries,” she added.
SECOND
Peirce has been asked how the drying group of the dry crypto plans to resolve long -standing uncertainty to find out if specific digital assets are classified as titles or products, and the criteria of taxonomy which will guide these determinations.
She replied that the US Congress is working on potential legislation that will define these parameters. However, the SEC organized a series of cryptographic round tables and the agency believes that most tokens do not integrate into the securities bucket.
“This does not mean that they cannot be sold in the context of a transaction in securities, and if they are, it is something that we regulate,” she added. “We will try to identify the scope of this capital lifting transaction and the disclosure and recording regime that has meaning for this particular area.”
Peirce has continued that real token workers can also be titles, such as tOKENISED STOCKS.
“You can also create a token that has characteristics that draw it in the traditional definition of an action, an obligation or a note,” she said. “We have a lot of work to do when a token is the subject of an investment contract, which is a type of security in the United States.”
The commissioner was essential as to the use of the application of the dry In Crypto, which she described as a blunt instrument that added to the confusion about the regulations and had the appearance of being arbitrary. Consequently, an environment is created in which criminals do better than people who try to build something legitimate. Peirce argued that the absence of a legitimate framework led to entities that served American investors to install abroad, such as the FTX.
“Once you have obtained a framework in place so that the projects can register and make disclosure, it will be much easier to bring the application under these rules,” said Peirce.
She continued that the best way to protect investors is to allow innovation to ensure that the markets are dynamic. New entrants who have better ideas to stall that are not faced with excessive regulatory obstacles to entry and holders should be able to try new things in a timely time.
“Another point that is really important to remember is that the heart of this technology is disintermediation,” she added. “There may be a tendency to regulators to try to centralize everything and it is not a good idea.”
CFTC
With regard to disintermediation, Pham argued that decentralized financing protocols (DEFI) are the equivalent of software, but the operator of a platform that uses this software to provide access to financial services must be properly authorized. PHAM also stressed that intermediaries play an important role in the CFTC regulatory framework, as they are responsible for the protection of customers, know the disclosure of your customers, the reports and various other guarantees.
She thinks that the same principles that regulators use to approach algorithmic trade or automated market manufacturers can be applied to DEFI protocols.
Caroline Pham, CFTC
“It is really important that we focus on activity and not on technology,” said Pham. “For example, many people do illegal things on the internet but the Internet is not illegal. Doing illegal things on the Internet is illegal.”
PHAM has been asked if a form of equivalence or mutual recognition regime is being discussed between the United Kingdom and the United States in relation to the cryptographic frameworks which are set up.
She said the CFTC was eager not to repeat errors from the past when the Dodd law Frank was implemented in 2010 after the 2008 financial crisis.
“We must not make a Dodd Frank for the crypto, which had so much duplication, expensive, heavy, of unnecessary registration, compliance and reports that only the largest companies could follow these general costs,” she said.
PHAM is used to supervising a compliance program of $ 1 billion which involved 1,000 full -time employees. She argued that this regulatory burden led to consolidation, which can lead to risk of concentration and other dangers for financial stability.
“We must also think about the fragmentation of the market, in particular for the digital asset markets which are intrinsically without border, and ensuring that mutual recognition is integrated into this approach,” she added. “Unfortunately, this was not dialogue in the United States and this is not a characteristic of legislative proposals.”
In March, Pham suggested that mutual recognition was integrated into the existing CFTC recording categories,
‘We can really hit the ground running from the first day that is RImportant from the point of view of the United States because we are far behind the rest of the world by providing regulatory clarity, “she said.
Pham also stressed that there is a gap between the moment when legislation is adopted and when the rules are written. In the case of the Dodd Frank law, it took four to five years at the CFTC to complete the complete consultation and the writing of rules. However, the CFTC has a large and flexible authority to use exempt relief so that the experiment is authorized, because the regulator has long been a double mandate to promote responsible innovation and fair competition.
Pham said: “It is in fact that the CTC created for the first time a regime around OTC derivatives in the 1990s and a regime around retail trade in the 2000s. This is something that we could use now, certainly for the merchants of the Commission in the long term on our term exchanges.”
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