SEC Commissioner Hester Peirce called on U.S. regulators to rethink financial surveillance rules so digital identity systems and decentralized networks can protect privacy without weakening enforcement.
Peirce delivered the speech Sept. 23 at Sifma’s 2026 Digital Assets Conference in New York. She said know-your-customer and anti-money-laundering regimes create stores of personal data that are costly, duplicative and vulnerable to hacking.
The Republican commissioner, whom Reuters has described as known for her supportive stance toward crypto, argued that attribute-based credentials – digital IDs that vouch for a single fact about a person – and zero-knowledge (ZK) proofs could confirm facts such as age, citizenship, accredited-investor status or absence from sanctions lists without exposing a person’s name, income or address. She urged the government to replace prescriptive data-collection mandates with attribute-based verification where feasible and make it the norm for firms to rely on identity checks already done by other regulated institutions.
Peirce also said regulators will have to adjust to permissionless networks, which she defined as ones run by automated, unchangeable code, with no middleman holding users’ assets and every user and transaction treated the same. Public blockchains, she added, preserve auditable transaction records for law enforcement.
The DeAI angle: Peirce did not discuss artificial intelligence, but her proposal addresses a core challenge for decentralized AI agents – proving that a user or agent is authorized to act without exposing underlying identity data. A regulatory path for reusable, privacy-preserving credentials could reduce dependence on centralized identity stores while helping agents access financial services. Her speech offered a policy direction, not a concrete rule or timetable.