SEC Commissioner Calls for U.S.-U.K. Regulatory Collaboration on Digital Assets
SEC Commissioner Hester M. Peirce called for U.S.-U.K. regulatory collaboration and proposed a cross border "joint digital sandbox" that could foster innovation across capital markets while enhancing regulatory insight.
In remarks to the City of London Corporation (financial sector) at Guildhall, Ms. Peirce highlighted crypto as a natural fit for sandbox experimentation, citing blockchain’s potential to increase transparency, lower costs, and unlock new forms of market infrastructure. She warned that many use cases "likely remained unexplored in the face of regulatory hostility" and argued that the borderless nature of crypto makes it "ripe for experimentation." She expressed hope that the SEC’s Crypto Task Force could work with the U.K.’s FCA on cross-border pilots, especially in areas like stablecoins, tokenized assets, and digital identity.
Ms. Peirce offered recommendations for the development of such a cross-border sandbox: (i) first, she suggested that a new term be used that might better reflect its purpose (such as "technology incubator"); (ii) second she emphasized that a sandbox without a workable "exit ramp" risks stalling innovation rather than advancing it into the broader market; (iii) third, she warned not to impose rigid limits and to allow for flexible extensions to avoid "putt[ing] sand in the gears of a growing company," or forcing firms to turn users away just as momentum builds; (iv) fourth, she encouraged the use of transparent terms for entry standards and to ensure inclusive access for firms of all sizes, so as not to risk turning the sandbox into a gatekeeping tool; (v) fifth, she recommended ensuring that sandbox participation be industry-driven, not government-planned, and that it should reflect a "response to real and immediate human needs;" (vi) sixth, she rejected the use of sandbox to pursue political goals like diversity or climate policy, calling instead for conditions that support regulatory function, "not ... political outcomes"; and (vii) seventh, she reiterated the importance of protecting investors while making room for new ideas. She cautioned that regulation can "go too far in seeking to eliminate risk," thereby stifling the innovation that markets need.
Ms. Peirce also cautioned that diverging global regulatory frameworks—such as Europe’s "double materiality" approach—risk distorting the function of capital markets. She warned that securities regulation should remain anchored in its core mission and not be turned into "a government-orchestrated initiative" to pursue goals beyond investor protection and market efficiency. She encouraged feedback on the SEC’s review of Foreign Private Issuer rules, citing a UK-based commenter who asked the Commission to preserve FPI status for firms with "genuine foreign governance and infrastructure."