SEC CHANGED COURSE ON CRYPTO. "CRYPTO MOM" COMMISSIONER HESTER PEIRCE EXPLAINS WHY!

Diplomacy channels much like the Strait of Hormuz are blocked. Iran is charging ships a toll in four currencies: the Chinese yuan, stablecoins pegged to the dollar, and Bitcoin. And the SEC commissioner who spent years dissenting from inside the agency just watched her own safe harbor proposal become official policy. In this episode, we're exploring three intersectional stories: the geopolitics of money, the infrastructure adoption, and the architecture of US crypto regulation. They're all colliding in real time. If you've ever wondered whether crypto is ready for the real world, the real world just showed up at crypto's front door. I'm Dr. Tanya M. Evans and this is Confidently Crypto.

Welcome to Confidently Crypto. I'm your host, Dr. Tanya M. Evans, digital asset regulatory strategist, CEO of Advantage Evans Global Regulatory Strategies, board member at Digital Currency Group, law professor and author of Digital Money Demystified and Electing Crypto, both available at digitalmoneydemystified.com. Now, this show exists to help you, whether you're crypto curious, a skeptic, an investor, a legal or financial professional, or just someone who knows this technology matters but doesn't quite know where to start, navigate the digital asset economy with clarity and confidence. No hype, no jargon, just the real story. And today's episode is really special. I sat down with SEC Commissioner Hester Peirce for a wide-ranging conversation about the SEC's shift from enforcement to rulemaking, a five-part token taxonomy, the 2% haircut framework, sandboxes, cross-agency collabs with the CFTC, and her advice for both law students and mid-career lawyers. So, you're really going to want to stay for the whole thing. But first, let me bring you up to speed. Here's your state of crypto.

So, here are the five stories you need to understand right now. Story number one, the Strait of Hormuz just became a crypto case study and today it became a full-blown international crisis. I covered this breaking story in a recent Forbes.com article. The link is on my homepage at proftanyaevans.com. And on Sunday, April 12th, the story escalated dramatically. Peace talks between the United States and Iran collapsed in Islamabad overnight. Vice President Vance left Pakistan saying the two sides could not reach an agreement primarily over Iran's refusal to abandon its nuclear ambitions. President Trump announced that the US Navy will now begin blockading any and all ships trying to enter or leave the Strait of Hormuz effective immediately. CENTCOM confirmed the blockade of all maritime traffic entering and exiting Iranian ports beginning Monday at 10:00 a.m. Eastern, and the Department of Justice announced it will vigorously prosecute anyone who buys or sells sanctioned Iranian oil. Here's where this becomes a digital asset story. Iran's Islamic Revolutionary Guard Corps, or the IRGC, has been running what amounts to a toll booth operation in the strait. Ships passing through have been charged up to $2 million equivalent per vessel with payment accepted in the Chinese yuan, Bitcoin, and potentially USDT and USDC, both stablecoins pegged to the US dollar. Iran's parliament passed legislation specifying these fees and authorizing what they call digital currencies developed with Iranian company participation. So, think about what this means for the regulatory frameworks we've been building here in the United States. The Genius Act was designed to regulate stablecoins, but its enforcement architecture depends on compelling issuers to comply. And Bitcoin, well, it has no issuer to compel. And this is the exact stress test that exposes the gap between the frameworks we've written and the reality of how decentralized assets actually move in the world. Chainalysis and TRM Labs both confirmed this past week. While the toll system has been announced and ships have been charged, actual on-chain evidence of Bitcoin payments at scale has not yet materialized, at least not as of the date of this recording. TRM documented approximately $1 billion routed through offshore exchange-branded stablecoin infrastructure that's tied to the IRGC. And CoinDesk reported a new wrinkle: the Iran-backed Houthi regime, which already uses crypto to trade oil, has raised the prospect of imposing a second shipping toll choke point in the Red Sea. So we may not be talking about one crypto toll booth, we actually may be talking about two. In my Forbes piece, it frames the Hormuz situation as a Genius Act stress test. With today's blockade announcement, the stakes just went up considerably. I'll share more as that develops. And if you're holding Bitcoin through all of this uncertainty, your custody setup matters more than ever. Whether you're using a hardware wallet like Ledger or SecuX, the principle is the same. Self-custody is how you maintain control when the world gets unpredictable. If you haven't already moved your long-term holdings to cold storage, now is absolutely the time. Links at proftanyaevans.com/partners.

Next up, story number two. Square just auto-enabled Bitcoin payments for 4 million merchants and nobody's asking the right questions. So, two weeks ago, Block, Jack Dorsey's company, flipped the switch. Square now automatically enables Bitcoin payments for eligible US sellers. This is not opt-in. This is default on. 4 million merchants can now accept Bitcoin at checkout with instant conversion to US dollars. No processing fees through the end of 2026 and no additional setup required. Transactions run on the Lightning Network for near-instant settlement. Lightspark CEO David Marcus called it a potential TCP/IP moment for money. The infrastructure story is real. Merchants receive dollars, so there's no balance sheet crypto exposure, and merchants can even opt to retain a portion of their daily sales in Bitcoin. One analyst estimated that if even 5% choose to hold, you'd have 200,000 businesses adding Bitcoin to their balance sheets. But here's what nobody's covering and what I'm writing about for the Hub News. Not a single outlet in the coverage cycle addressed the merchant literacy gap. What happens when a micro-business owner who's never touched crypto suddenly has it turned on by default? What about tax compliance under 1099-DA? The cost basis obligations. State-level regulatory variation. New York merchants are excluded entirely. But what about the patchwork everywhere else? The coverage has been celebratory, but the question I keep coming back to is built, yes, but built for whom? The merchants who need the most education are the ones least likely to seek it out. And that gap is where the consumer protection story actually lives. If you're a lawyer or financial professional and your clients use Square, this is heading your way. Understanding the regulatory and tax implications of crypto payment infrastructure isn't optional. It's a competency issue. And that's exactly what we cover in the Web3 Ready Lawyer and Web3 Ready Professional Executive cohorts. I've also added a new one for law students and you can get all of that information at proftanyaevans.com/beyondthejd.

Story number three just opened its crypto waitlist and the retail brokerage race is on. Now this is a big one for everyday investors. Charles Schwab confirmed on April 3rd that it remains on track to launch spot crypto trading in the first half of this year. The company has opened a waitlist for its new Schwab Crypto Account, which will actually let clients buy and sell crypto, most specifically Bitcoin and Ethereum, directly alongside their traditional investments. CEO Rick Wurster says the rollout begins with internal testing for employees, followed by a small group of clients in Q2 before expanding more broadly. The service will run through Charles Schwab Premier Bank and Schwab manages nearly $12 trillion in client assets across almost 39 million active accounts. That's not a typo. 12 trillion. Now, there are real limitations at launch. First of all, it's not available in New York or Louisiana. Also, there are no external crypto deposits. So, you can't deposit crypto you have already onto the Schwab platform. There's also no self-custody withdrawals. So, once you purchase on platform, you can't withdraw it to self-custody. There's no staking. There are no limit orders, but the significance at least isn't the feature set. It's really the signal because when a platform of this scale puts a 'join the waitlist' button on its website for crypto trading, we have absolutely and positively crossed a tipping point. Also, Morgan Stanley's E*TRADE announced a similar H1 2026 timeline for Bitcoin, Ethereum, and Solana trading through a partnership with Zero Hash. Between Schwab and E*TRADE alone, you're talking about tens of millions of traditional brokerage clients getting direct crypto access inside the accounts they already use for stocks and bonds. This is the institutional plumbing that turns regulatory clarity into actual market participation. And that's why the work Commissioner Peirce and Chairman Atkins have done at the SEC, which you'll hear about in our interview, really matters beyond the policy world. Rules without rails don't move anything. And these are the rails. So definitely follow this story.

Story number four, the rest of the world is not waiting. So, three developments in the past 72 hours that tell you this is a global race. Hong Kong's Monetary Authority issued its first-ever stablecoin licenses on April 10th to HSBC and Anchorpoint Financial, a joint venture between Standard Chartered, Animoca Brands, and Hong Kong Telecom. When HSBC is getting a stablecoin license, that's not a crypto story. It's actually a banking infrastructure story. Japan's cabinet approved a bill this week to reclassify crypto as financial instruments under the Financial Instruments and Exchange Act. Insider trading bans, issuer disclosure requirements, a kind of mature regulatory architecture that treats digital assets as real financial instruments and not just speculative novelties. And UBS with five major Swiss banks announced a partnership to test the Swiss franc-denominated crypto stablecoin. The US has made real progress, but the competitive reality is that regulatory clarity has become a global race and the jurisdictions that move first attract the capital, the talent, and the infrastructure.

And finally, story number five, the markets. Bitcoin is trading around $73,000 in extreme fear territory. Ethereum at approximately $2,285. And the fear and greed index has been deep in extreme fear across the board, dropping into single digits earlier in April, a level that we've seen fewer than 20 times since the index launched in 2018. Historically, extreme fear readings have preceded positive returns over the following months. But I need to be clear. Past performance does not predict future results. And the macro environment right now with active military conflict in the Strait of Hormuz and a global trade war is unlike anything we've seen during prior fear cycles. What I will say is this: that institutions aren't panicking. Schwab is launching. Morgan Stanley is launching. The smart money is building infrastructure while retail runs scared. And that divergence, institutions positioning while individuals sell, is exactly the dynamic I talk about in Digital Money Demystified. Volatility is information, not something to avoid, something to be managed and calibrated. If you want to learn more about that, grab your copy at digitalmoneydemystified.com. It's a great place to start to at least separate fact from fiction. And if you're an investor trying to make sense of all of this, track your portfolio. Consider using CoinTracker. It connects with your wallets and exchanges. It tracks your cost bases, flags taxable events, and gives you a consolidated view of where your assets are and what you owe. With the 1099 digital assets requirements coming into sharper focus, clean records aren't optional, they're essential. Visit the link at proftanyaevans.com/partners for more.

So that's the landscape. A geopolitical crisis stress-testing our regulatory frameworks in real time. Retail brokerage giants opening the floodgates to direct crypto access. Payment rails expanding to millions of merchants with open questions about who is actually being served. And a global race for regulatory clarity that the United States is competing in but not yet dominating. And that is exactly why the conversation you're about to hear matters so much. I sat down with SEC Commissioner Hester Peirce and I want to tell you, the commissioner and I have been in conversation for years now. She was one of the first people at the regulatory level who was accessible, transparent, and consistent in engaging with me, with my students, and those who are exploring this space from both an academic, legal, and policy side. And in this conversation we go deep. She talks about what it took to move the SEC from enforcement-first to actual rulemaking under Chairman Atkins. She walks through the five-part token taxonomy and how confident she is those categories will actually hold up over time. We briefly explain the 2% haircut framework, a staff-level change that she says makes it commercially feasible for broker-dealers to participate in this space. She makes the case for regulatory sandboxes and cross-border experimentation. And she responds directly to the criticism that the pendulum has swung too far toward deregulation. And her answer reframes the entire debate around investor protection. And finally, she shares advice for law students and even mid-career attorneys that I wish I'd heard when I first started down this path. Commissioner Peirce is exactly who you want explaining this moment. So enjoy and let's get into it.

Welcome back everyone to Confidently Crypto. As promised, I have the great, great pleasure to reconnect with Commissioner Hester Peirce from the SEC. We've run down all of her bona fides, but I wanted to just leave a lot of space for engagement and to just talk about the state of where the direction of enforcement is kind of the lead-up to where we are in the crypto space. And in particular, I've been so drawn over the years to Commissioner Peirce and her very thoughtful writings on various topics. And also, Commissioner, your accessibility and transparency has been, I mean, you've just been so consistent throughout my time of interacting. We connected early in my exploration just after I hit my head somewhere at the bottom of the rabbit hole as you know, a tech-adjacent person and an academic just really, really focused on personally not knowing what cryptographically secured assets or distributed ledgers, what all of that would mean to me personally in 2017. But I'd come across this academic paper at the intersection of my expertise which is in intellectual property and new technologies and this was the new kid on the block at the time. And no matter my personal opinion, I wanted to make sure that I was sufficiently well-versed so that the next wave of law students and new lawyers and those who are repositioning themselves could be well-prepared and so that the next wave of legal practitioners would be conversant in this space. And so even before we kind of get into the state of cryptocurrency regulation, your role, some of your recent writings about the 2% haircut, all of that. Just at a fundamental level, I always think it's quite interesting that people hear how, and I get this question all the time, so I'm interested how you feel about it. How did someone like you get into something like this, whatever that 'this' means for folks? So, kind of talk to us about what led you to the work that you do now.

It was fascinating to see the development of the crypto task force and to see the dramatic shift in regulatory focus. And what I'm about to ask is kind of the ramp-up to the discussions between the SEC and CFTC. And for those who don't really have the history, we've talked quite a bit in previous episodes about the status before 2025, all the things both on the legislative side and on the regulatory front to move forward and to take a decided shift in the approach to the classification of digital assets. One of the things that was most concerning to me for so many years was the absence of a classification or a taxonomy that numerous agencies could agree upon. And what we've seen out of the conversations, not necessarily the conversations but some of the public information and discussions around the importance of classification in order to have a brighter, I don't know if it's bright, but a brighter line that distinguishes between something that might be an investment contract and therefore rise to the level of securities under the auspices of the SEC versus the underlying asset that in and of itself, if we were comparing, you know, a cryptocurrency more broadly to an orange, and you know why I'm saying that, can you talk about the importance of being clear for an entire body of regulated parties to at least be using the same terminology to make it easier for regulated parties to know and for agencies to know, 'this is my purview. This is perhaps another agency.'

And for listeners and ultimately viewers, we're talking about five basic categories or buckets: digital commodities, securities, collectibles, tools, so that suggests utility, and certainly stablecoins. I'm wondering kind of as a quick follow-up, how confident are you? And there's a method to the madness of my conversation because I'm thinking of a conversation I had in class recently challenging students, law students, to think through how confident they would be that these categories would hold up as the technology evolves. I intimated to a response to that by the latter part of your answer. But how do you feel about how these things hold up and what to do for those edge cases?

That reminds me of, you know, I think of some of your writings and commentary around sandboxes. I've always been a fan. I think the industry has greater latitude to explore things of that nature. I've done some work and research around, for example, other countries, most notably now Ghana, and trying to work through what that looks like. There have been states that are exploring here in the United States what a sandbox might look like. Talk about the benefits to regulators quite frankly. We always assume that there'll be some benefit to industry participants who have a safe environment to derisk at least the regulatory liability when they're operating in a vacuum. I also have seen the benefits or heard the benefits to regulators who get more information. And so that kind of dovetails off of what you just said. Could you share some of those thoughts around sandboxes and the benefits to regulators?

Yeah. It's an excellent point and to see the prevalence of exchange traded funds now not only in the traditional market but as we saw ETFs for Bitcoin and ETH come through as well, it is fascinating because now that's the best example not only in traditional markets but the exploration of other underlying assets as well. Switching over, because one of the things that I tell students and also in the consulting world is one of the best ways to keep up with what's going on with regulators is subscribing directly to their announcements. And I spend quite a bit of my mornings or afternoons or sometimes burning the midnight oil catching up on various announcements and one that caught my eye recently was about this 2% haircut. And not being a securities lawyer but being very interested in some of the reasons or rationale where a company or bank might be hesitant or reticent to move into the space because of technical parameters that don't make it in their best interest. And then you had recently made some statements or maybe it was just a written statement around those changes. So I wrote about that, covered it in class. For those listeners or viewers who aren't securities lawyers, can you talk about what that guidance around the quote unquote 2% haircut framework actually means for firms that want to custody crypto, and why it matters? It caught my eyes, like I'm not a securities lawyer but this seems like a very big deal to me and I didn't see as many people writing about it as I thought should. I think it's a hugely important change.

There's been so much conversation around the move forward with stable coins because over in the legislative branch we saw as of July of 2025 signing in of the Genius Act into law with some very clear legislative parameters around stable coins in particular. I know not all jurisdictions move forward to kind of separate things out and you are in the executive branch not over the legislative branch but it's been quite fascinating also as a professor who taught administrative law to see how important administrative law is to understanding the entirety of this relationship. I think of my old teaching package of certainly intellectual property. I taught first year property for 10 years. I taught wills, trust and estates. I taught administrative law, a little entertainment law and business law and it all came full swing into one place that is what I lovingly call blockchain, cryptocurrency and law. This balance. I bring it up and kind of set it up this way because can you impress upon the audience about the way that the legislative framework really is just that, a framework, and the importance of subject matter experts in the executive branch in various agencies to actually move forward with the framework but kind of be the mortar if I were to use a brick and mortar type of analogy. That connection to administrative law is so critically important to understand how something that happens legislatively has an impact. And the final point to that is kind of unless and until Congress says something different, we are focused on the subject matter experts with the task at hand having some legislative power to make rules to go forward with enforcement. But they're distinct but integral, probably is the best way to say it.