SEC Commissioner Hester Peirce recently delivered an important speech discussing financial privacy and the need to modernize existing laws.
Need for Modernizing the Bank Secrecy Act
Peirce called for the modernization of the Bank Secrecy Act (BSA) and the third-party doctrine, which allows the government to obtain information without a warrant. According to Peirce, the current financial surveillance regime is overly invasive and out of step with modern technology.
Disintermediation through Cryptocurrency
Peirce also emphasized the importance of disintermediation in financial systems. Technologies such as cryptography, zero-knowledge proofs, and smart contracts reduce the need for intermediaries. She likened this to early telephone systems, where operators could listen to conversations, whereas now people take for granted the ability to call without third-party involvement.
Reaction to Hester Peirce's Speech
Cryptocurrency industry representatives reacted positively to Peirce's speech. Peter Van Valkenburgh, executive director at CoinCenter, noted that it was one of the clearest defenses of financial privacy in the context of crypto and new technologies. Nate Geraci, president of NovaDius Wealth Management, also encouraged everyone interested in cryptocurrency to read her speech in full.
Hester Peirce's speech highlights the importance of safeguarding financial privacy in the age of new technologies and the evolving financial landscape.
