SEC Chairman says for the first time that federal regulators are paying attention to the impact of blockchain technology

Rage Comment : This is the first time in recent years that the SEC has publicly discussed the potential of blockchain and made it clear that it is studying the possible impact of securities issuance based on blockchain technology. In December last year, the SEC officially approved Overstock to issue its own shares on its own blockchain stock exchange, which is believed to be the SEC's consideration of the possibility of operating a decentralized securities trading system based on blockchain technology. Some financial professionals believe that the birth of blockchain technology is likely to change the way assets are issued from review before issuance to issuance before review, thus causing major changes in the global financial ecology.

Translation: Nicole

The SEC chairman spoke last night about the federal agency’s current and future plans for regulating blockchain.

The short summary is that in the SEC’s past and future dealings with blockchain, Chairman Mary Jo White called on companies and individuals to look to technologies like blockchain to accelerate the transformation of securities.

In her public comments, White said:

“Of particular importance is whether blockchain applications would need to be registered under the Commission’s regulatory regime, such as as transfer agents or clearing agents. We are actively studying these issues and their implications.”

This is the first time the SEC has spoken publicly about the potential for the future of blockchain since December, when it approved Overstock.com's plan on Dec. 16 to provide grants to securities firms that use the bitcoin blockchain.

A few days later, on December 22, SEC Secretary Brent Fields issued an advance statement announcing the proposed rules for transfer agents and asking the public for their thoughts on the use of blockchain technology under federal securities regulations. According to a transcript of last night’s speech, these public comments will be used to help evaluate the regulatory process.

The big vision of blockchain

White concluded his speech by commenting that the main theme of the speech was to protect investors in rapidly changing financial markets.

She worries that the new funding channels will be bad for pre-IPO startups, and new legislation is intended to allow companies to use equity awards as part of crowdfunding incentives.

In addition to her comments on blockchain’s potential impact on the securities industry, White also highlighted other “fintech challenges,” including robo-advisors — or machine-driven investment advisors — and marketplace lending, which uses software to directly connect borrowers with non-bank lenders.

“Silicon Valley Initiative: Protecting Investments in Pre-IPO Issuers,” White said at an event sponsored by Stanford’s Rock Center for Corporate Governance, where the SEC’s San Francisco regional office is trying to engage in dialogue with Silicon Valley academics, entrepreneurs, executives and others.

In her speech, White talked about how new financial technologies “have the potential to transform the way markets operate in every way possible,” going on to argue:

“This innovation allows us to know there are so many benefits to protecting investors, so they – and we – can have confidence in this growing and changing market.”