Hester Peirce, a member of the US Securities and Exchange Commission (SEC), said in an interview with Forbes that delaying the approval of Bitcoin Trading Exchanges (ETFs) could lead the public to look for more risky and less reliable channels.
Peirce has earned the nickname “Crypto Mom”, after the disagreement with the rejection of bitcoin ETFs was made public.
Although Commissioner Peirce agrees with her other colleagues on the need to address any potential risk of financial fraud, her position is that the SEC should be clearer about ETFs.
The commissioner, who has always called for greater clarity, says many applicants fail to understand what has gone wrong when looking at rejection reports and researching what they need to do to comply with the requirements.
This need for greater clarity is something that the Commissioner emphasises when disagreeing with rejected ETF applications. Peirce says many applicants have tried to look at rejections to figure out what they need to do to comply.
“I think by setting approval standards that are difficult for anyone to figure out how to satisfy, we are trapped in a hole that is difficult to escape.”
Pierce believes that the interest in cryptocurrencies has become very high and at the same time investors have access to them regardless of possibly safer, regulated instruments such as ETFs. And she asks the rhetorical question, referring to ETFs, “wouldn’t it be better for us to allow them to access them through more typical stock market products that are more familiar?”
Asked about MicroStrategy’s bitcoin strategy and the growing interest of institutional investors in the cryptocurrency space, she said:
“The fact that there is a lot of economic activity in the field of cryptocurrencies means that we will see more points of contact with the markets through listed companies that are somewhat involved with cryptocurrencies.”
“As investment institutions enter this field, they demand higher standards and as soon as these higher standards are implemented, then even more institutions enter.”
This cycle demonstrates the emerging ‘institutional’ introduction of crypto-markets and the need for ETFs. This introduction would make the Securities and Exchange Commission more flexible with a cryptocurrency ETF.
Don’t forget that Cboe, Goldman Sachs, and Fidelity Investments bitcoin ETF applications are still pending.