After former SEC commissioner Paul Atkins, who is pro-crypto, was nominated by Trump to replace Gary Gensler as chairman, the market is increasingly expecting the US's regulatory attitude towards cryptocurrencies to move in a more friendly and relaxed direction. Hester Peirce, known as the "Crypto Mom", hinted in an interview with Coinage yesterday (20th) that the SEC is planning to push for a series of policy reforms that are favorable to cryptocurrencies.
Hints that ETF may open physical subscription/redemption and allow pledging
Hester Peirce said, "Washington is in a transitional period, and the SEC is no exception." She mentioned that although it will take time for the new chairman to take office, and there is still uncertainty in the future, the SEC is already prepared to immediately initiate relevant processes and push for some policy changes.
Hester Peirce specifically mentioned two major policy changes related to cryptocurrency ETFs that may be re-evaluated, including physical subscription and redemption, as well as allowing Ethereum ETFs to be pledged. She pointed out that unlike under Chairman Gensler, where these changes were almost impossible, she is optimistic about pushing these changes under the new government leadership.
"I suspect these issues are likely to be formally raised early on."
As Gensler's term as chairman is about to end on January 20, she believes the progress of related issues will become clearer. She mentioned: "When the majority within the commission shifts from being mostly opposed to mostly supportive of certain decisions, things will go much more smoothly."
This statement was quoted and retweeted by Bloomberg ETF analyst Eric Balchunas, who specifically noted that Hester Peirce had a smile on her face when she said this, seeming very happy.
Hester Peirce talked about approving physical subscription and redemption of BTC ETFs, as well as the pledging function of ETH ETFs, and said these features make the products more "practical" for investors, seemingly hinting that the approval of these reforms may be imminent.
Optimistic about clear regulatory framework
However, Hester Peirce warned that more radical reforms are expected to be gradually implemented after Paul Atkins is confirmed as SEC chairman. She stated:
We should consider these issues in a phased manner. Or, can we establish a framework, such as no-action letters or exemption orders, and provide clear guidance early on, such as, "You know, some things are not actually securities."
She further pointed out:
There will be a lot of adjustments and changes in the coming weeks and months, but I believe we can make some early progress.
If by the end of 2025, people can reach the state of "the regulatory framework is already sound", where they clearly understand and comply with the rules, and spend more time discussing the technology and its potential, that would make me very pleased.
Due to the tug-of-war between regulators and the crypto industry over the past few years, as well as the endless Wells notices accusing crypto companies of potential securities law violations, any approach that ends the threat of enforcement action is likely to be welcomed by the crypto industry. Hester Peirce's remarks already express optimism about this shift.
Consistent with VanEck's 10 predictions for 2025
It is worth mentioning that one of the 10 predictions made by the US asset management giant VanEck for the cryptocurrency field in 2025 is that the physical ETF for Ethereum will be opened for pledging, and the physical ETFs for BTC and ETH will both allow physical subscription/redemption.
The institution predicted that under the leadership of a crypto-friendly SEC chairman, and with the US embracing BTC through strategic reserves and increasing crypto adoption, multiple new cryptocurrency spot ETFs will be approved, including a Solana ETF, as well as the important reforms mentioned above for ETFs.
It also predicted that the SEC or Congress will abolish the accounting regulations (SAB 121) currently pushed by the SEC, paving the way for banks and brokers to custody spot cryptocurrencies, and that the federal government or at least one US state (possibly Pennsylvania, Florida or Texas) will establish a BTC reserve.
Further reading: VanEck's 10 Predictions for Crypto in 2025: BTC to Peak in Q1, Solana Spot ETF Approved, DeFi Hits New Highs...
