Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Congress passing the first federal legislation to regulate stable coins
Speaker 2: in a major win for the crypto market. Joining us now,
Speaker 2: I'm really pleased to say, for a first time here
Speaker 2: on Bloomberg TV on Blomback surveyment's the SEC Chairman, Paul Adkins.
Speaker 2: Chair Atkins, Welcome to the program, sir. It's good to
Speaker 2: see it, good to see you.
Speaker 3: Thank you very much for having me.
Speaker 2: Well, thank you for being here. Before we get into it,
Speaker 2: I wanted to offer you the opportunity, sir, to talk
Speaker 2: about your philosophy in this seed versus what came before you,
Speaker 2: in the difference maybe between deregulation and just innovation.
Speaker 3: Well, well, thank you very much.
Speaker 4: We are out to, you know, obviously, change direction at
Speaker 4: the SEC, and I think we've already done that here
Speaker 4: in my first two and a half or so.
Speaker 3: Months at the agency. But we're moving away from.
Speaker 4: Regulation through enforcement and uncertainty in the markets, especially with
Speaker 4: respect to cryptocurrencies.
Speaker 3: And digital assets in general. We're looking to set.
Speaker 4: Firm, clear rules of the road for people who are
Speaker 4: operating in that environment so that innovators can innovate, they
Speaker 4: can rely on their advisors to tell them, you know,
Speaker 4: which is the right direction and how they can build
Speaker 4: on solid ground.
Speaker 1: Regulators, though, can step in without explicit action from Congress.
Speaker 1: So when it comes to cryptocurrencies in the SEC, what
Speaker 1: actually comes next? What are your plans?
Speaker 4: Well, so even before I got to the SEC, Hester Purse,
Speaker 4: who's one of the commissioners and she used to be
Speaker 4: my counsel when I was a commissioner back in to.
Speaker 3: One thousand and two to two thousand and eight, was in.
Speaker 4: Charge of a crypto task force that we're calling it,
Speaker 4: and they are focusing on.
Speaker 3: Making clear rules for the industry.
Speaker 4: So for example, things like mean coins and stable coins
Speaker 4: that was just the subject of the bill that was
Speaker 4: passed yesterday are not securities, and before that was not
Speaker 4: necessarily clear. And so that's an example of how we're
Speaker 4: trying to put people at ease in the marketplace so
Speaker 4: that they can innovate and they can move forward with
Speaker 4: their plans and not have to look over their shoulder.
Speaker 1: When you were talking to reporters yesterday after the passing
Speaker 1: of this legislation, I believe you'll be at the White
Speaker 1: House today with the President when he signs it. You
Speaker 1: said the SEC is considering a quote innovative exemption from
Speaker 1: regulations to incentifize tokenization. What does that exactly mean innovated
Speaker 1: exemption and how long does this process take?
Speaker 4: Well, it'll be an inerative process. And right now we
Speaker 4: are working on setting forth different things that can again
Speaker 4: make it clear for people in the marketplace, you know
Speaker 4: which way is the is the true north for them.
Speaker 4: Let's just say so that they don't have to worry
Speaker 4: about falling off the ditch and falling onto the ditch
Speaker 4: and getting in trouble with the regulators.
Speaker 3: And so part of that will be working.
Speaker 4: With our colleagues of the other regulators and especially the
Speaker 4: Commodity Futures Training Commission. But let's just say that as
Speaker 4: we go forth and as we interact with the marketplace,
Speaker 4: we've had five roundtables now looking at various aspects of
Speaker 4: the digital asset space. So we are working hard at
Speaker 4: coming up with guidance and rules and we'll use every
Speaker 4: tool in our toolbox to help people understand what is
Speaker 4: how to stay out of trouble.
Speaker 5: Basically, Jaacken's one of the big concern is that a
Speaker 5: number of the stable coin issuers are not going to
Speaker 5: have the sufficient number of hard currency reserves on hand
Speaker 5: to really back those notes in a way that is
Speaker 5: as advertised. How are you to really counter that? Is
Speaker 5: that something that's in your list of concerns If the
Speaker 5: sec is going to be monitoring.
Speaker 3: Well, one thing that I think the new to be signed.
Speaker 4: A bill into law makes clear is that these are
Speaker 4: not securities and the whole it's the banking regulators who
Speaker 4: are going to be looking after them.
Speaker 3: And I think that's appropriate because of the role that.
Speaker 4: Stable coins play and I think will play in the future.
Speaker 4: Because part of the role promise I think digital of
Speaker 4: distributed ledger technology is immediate payment as part of the
Speaker 4: process of transactions, so settlement coming down to in effect
Speaker 4: almost heapless zero and to do it on the trade date,
Speaker 4: and that will make things much more efficient in the marketplace,
Speaker 4: save money, reduced risk in our financial system. So this
Speaker 4: stable coins are in the realm of the bank regulators
Speaker 4: and they will look after to make sure that there
Speaker 4: is adequate and as advertise, adequate backing to the stable coins.
Speaker 5: Jakins just sort of switching gears a little bit. There's
Speaker 5: been a lot of discussion around Congress and the President
Speaker 5: passing legislation that would open the door for people to
Speaker 5: take their money from the four to one case and
Speaker 5: put it into private assets, in particular private equity. How
Speaker 5: do you plan to oversee and make sure that that's
Speaker 5: done in a way that isn't potentially punitive for people
Speaker 5: who are retiring at ages where they need a lot
Speaker 5: more money for a lot longer.
Speaker 4: Well, on that issue, we've heard a lot of input
Speaker 4: from both the investors who want access to the private
Speaker 4: markets and to those sorts of products, and obviously from
Speaker 4: the people who are producing the products who are about
Speaker 4: to meet that demand. So but we have to do
Speaker 4: it carefully, I think, because of course the private markets
Speaker 4: are a lot different than the public markets. Their liquidity
Speaker 4: is not the same. There are all sorts of things
Speaker 4: for people who are not aware of the rules of
Speaker 4: the road where they could get hurt, and so we
Speaker 4: will work very closely with our counterparts at the Department
Speaker 4: of Labor who have oversight Ovarissa accounts to make sure
Speaker 4: that we have appropriate guidelines around these various products. And
Speaker 4: they're really for of course long term investment, especially private
Speaker 4: equity and things like that. So we have to do
Speaker 4: this in a smart way so that individual investors are
Speaker 4: not inadvertently into something that they didn't realize what they
Speaker 4: were getting into.
Speaker 1: Well, speaking of, for one, retirement plans, would you allow
Speaker 1: crypto into retirement plans? Because the Financial Time is reporting
Speaker 1: that we could see an executive order from the administration
Speaker 1: as soon as today allowing alternative investments into retirement plans.
Speaker 4: Well, again, you know, I think that you know, disclosure
Speaker 4: is key and that people need to know what they're
Speaker 4: getting into. So things like that are not for everybody,
Speaker 4: and and so especially in retirement plans. So we are
Speaker 4: I look forward to whatever may come out from the
Speaker 4: President as far as direction goes, but we are we
Speaker 4: need to address it because there is a demand out
Speaker 4: there for these sorts of products, and the government should
Speaker 4: not stand as a blocking agent for those sorts of things,
Speaker 4: but we need to enable it in the proper way,
Speaker 4: with proper guidelines and in proper disclosures.
Speaker 1: Sir Atkins, you run an independent agency, so does J.
Speaker 3: Powell.
Speaker 1: I would love to know are you under any pressure
Speaker 1: from this White House? And what would be your advice
Speaker 1: to J. Powell because it seems like you have a
Speaker 1: better relationship with President Trump.
Speaker 3: Well, I think.
Speaker 4: So I've been at the SEC now this is a
Speaker 4: third time. I was there in the early nineties and
Speaker 4: the Richard Breeden and Arthur Levitt, and then again from
Speaker 4: two to eight and now here in two thousand and
Speaker 4: twenty five. So frankly, I don't see really any difference
Speaker 4: in operation from back then to now.
Speaker 3: I know there's been a.
Speaker 4: Lot of coverage of that, but you know, we are
Speaker 4: working hand in glove with our counterparts in the administration
Speaker 4: and at the Office of Management and Budget and OIRA,
Speaker 4: as far as talking to them about rules and other
Speaker 4: things that we are going to be publishing, so you know,
Speaker 4: keeping them up to date, taking their comments, which are
Speaker 4: all very good. So I don't see any real difference
Speaker 4: frankly in the ambit of maneuver that we have at
Speaker 4: the agency. So I look forward to achieving a lot
Speaker 4: in the time that we have and because there is
Speaker 4: so much to do, this is what I like to
Speaker 4: call deferred maintenance that we have to address and so
Speaker 4: we are moving I think, at very quick pace, and
Speaker 4: so the rest of this year I think will be
Speaker 4: churning things out and moving in a different direction.
Speaker 2: Hopefully this is a start of an ongoing conversation. Appreciate
Speaker 2: your time, Chair Radkins. Thank you, sir, the SEC Chair
Speaker 2: Paul Atkins there down in Washington, d C.