It's morning at the SEC for defi innovation

The new Chair of the US Securities and Exchanges Commission (SEC) has given the most promising statements to date, putting a firm end to the era of regulation-by-enforcement which has plagued the US (and other countries) and making clear it is now to be replaced with rule-making to support innovation.

Key points from the speech including a philosophical alignment that:

The American values of economic liberty, private property rights, and innovation are in the DNA of the DeFi...movement.

and that:

Most current securities rules and regulations are premised upon the regulation of issuers and intermediaries. The drafters of these rules and regulations likely did not contemplate that self-executing software code might displace such issuers and intermediaries.

Chair Aktins has asked SEC staff to explore how further guidance or rulemaking may be helpful to enable people to transact with DeFi in compliance with existing law and he specifically highlighted the benefits of eliminating cost, increasing capital efficiency and enabling new kinds of financial products with greater liquidity.This stands is sharp contrast to many jurisdictions where language around introducing friction was increasing around tackling scams, and where the regulatory perimeter is being 'tested' by regulators at great cost which might be better put to use funding fit for purpose regulation and rules. It is also a sharp departure from attempts 2 years ago by the SEC, as one leading us attorney put it the:

The SEC [was] simply seeking to ban DeFi protocols in America

With a markets infrastructure bill before Congress and stablecoin legislation likely to pass parliament, together with tax amendments expected shortly the US is rapidly moving to embrace crypto and blockchain technology in a way that other countries will be watching closely, as the size of the US market can dictate standards in financial services and products like few others can. First published at www.bitsofblocks.io reproduced with permission