A new chief regulator means U.S.’s «crypto mom» faces a tougher fight to entice in digital asset projects, but one state is forging ahead as the «Delaware for crypto».

Hester Peirce’s fondness for Switzerland goes way back to her student days, traveling through Europe while subsisting on «a diet consisting primarily of Nutella,» she told a Zug audience in 2018. Peirce said she left the alpine nation with a lasting, favorable impression – due in large part to Geneva's spotless, welcoming youth hostel.

Some 30 years later, she leads the charge for a more receptive welcome for innovation and digital assets at the Securities and Exchange Commission, where she is one of five commissioners. Her (virtual) visit to Switzerland later on Thursday comes at a crucial juncture in whether she can push through her views at the agency.

Scathing Remarks

She made no bones last week about her disappointment after the SEC, now in the hands of Gary Gensler, signaled it isn't planning on taking up anything crypto-related this year. This leaves blockchain firms in the dark about how they will be treated by regulators down the road.

 

«The agenda is missing some other important rulemakings (sic), including rules to provide clarity for digital assets,» she and fellow commissioner Elad Roisman wrote on Monday, in response to the SEC’s publication last week of its plans this year.

«Perhaps the absence of these rules is attributable to the regrettable decision to spend our scarce resources to undo a number of rules the Commission just adopted,» the duo said.

Peirce’s remarks – scathing even in political circles – matter because the U.S. is generally keen to attract blockchain and crypto firms, but is perceived by the nascent industry as having dithered over the regulatory framework.

Nimble Swiss Positioning

Enter Switzerland, which is seeking to develop a digital asset-friendly framework rapidly. Home to Tezos, Ethereum, Cardano, and a host of other cryptocurrencies, Switzerland marshaled its forces to roll out a distributed ledger law in February.

Lawmakers are poised to introduce another, for trading systems based on blockchain, in August. More guidelines – such as how tokens are treated in case of company insolvency – are being debated in parliament. The legal foundation for the sector has been complemented by watchdog Finma's regulatory acumen.

«Finma, which has proven very approachable and responsive with their resources, has established its authority in this area,» according to Karin Lorez, a Zurich-based legal adviser for digital assets. «This makes the Swiss system simpler to navigate for crypto projects looking to set up.»

Crypto Has Its «Delaware»

The U.S., of course, has also grown crypto-friendlier, luring back Facebook-backed payments system Diem. Amid Peirce’s open disappointment about the SEC failing to wade in, the state of Wyoming is quietly embracing crypto.

The western state will allow decentralized autonomous organizations – DAOs – to be recognized as limited liability corporations. Chris Rothfuss, a technologist who sits in Wyoming’s state legislature, was the driving force behind the law, which gave rise to the «Delaware for crypto» moniker (in reference to the eastern seaboard state's tax haven laws).

Curiosity About Swiss Regime

It isn’t clear what Peirce thinks of the Wyoming DAO law, but she is likely to be asked when she speaks to Switzerland’s Crypto Finance Conference later on Thursday. Her libertarian-infused enthusiasm for cryptocurrencies are clearly not dampened by her boss' studious avoidance of addressing issues such as bitcoin exchange-traded funds.

Are Peirce’s warm words about the U.S. enough, as new projects eye their regulatory prospects? «Many of my clients are from outside Switzerland – including the U.S. and Canada – and want to take a look at the Swiss regime because they aren’t entirely sure what awaits them in their home domicile in regulatory terms,» Lorez, the Swiss legal adviser, said.