In the rapidly changing landscape of cryptocurrency and blockchain technology, topics such as centralized stablecoins, permissioned blockchains, and corporate treasury solutions are often at the forefront of discussions. These innovations, albeit groundbreaking, diverge significantly from the rebellious, privacy-centric ethos of the cypherpunk movement that contributed largely to the foundation of modern crypto. Surprisingly, a prominent advocate for cypherpunk principles today emerges from an unexpected quarter: the U.S. Securities and Exchange Commission.
Recently, SEC Commissioner Hester Peirce delivered a thought-provoking speech at the Science of Blockchain Conference at U.C. Berkeley, titled “Peanut Butter & Watermelon: Financial Privacy in the Digital Age.” In her address, she made a strong case for privacy, resonating with the fundamental ideas of the cypherpunk movement, and referenced Eric Hughes, the pioneer behind the cypherpunk mailing list and the author of the influential A Cypherpunk’s Manifesto.
Peirce’s observations reveal an unconventional view for a government official, stressing that technological advances can safeguard privacy in areas where legislation might fall short. She quotes Hughes: “We cannot expect governments, corporations or other large, faceless organizations to grant us privacy out of their beneficence.” This passage from Hughes’ 1993 manifesto encapsulates a profound distrust of institutional benevolence — a notion Peirce reinforces in her speech. Hughes, writing at the inception of the digital age, asserted that “privacy in an open society requires cryptography,” highlighting the necessity for individuals to control their personal data independently of others.
In her 2025 presentation, Peirce expands on this by citing modern technologies as fulfillments of Hughes’ vision. She commends crypto mixers, privacy-focused blockchains, and decentralized physical infrastructure networks (DePIN) for facilitating anonymous dealings. “Advancements in technology can reduce our dependence on third parties and thereby lessen our need to share data with them,” Peirce succinctly observes, encapsulating the ethos of disintermediation. This perspective aligns with Hughes’ exhortation for “systems which allow anonymous transactions to take place,” underscoring that such anonymity gives individuals the choice of when to disclose their identity.
What makes Peirce’s position particularly noteworthy is her acknowledgment that these technologies should remain available “even though doing so enables people to use them for bad purposes.” This realistic acknowledgment of potential misuse reflects a quintessential cypherpunk perspective, prioritizing essential privacy rights over full control. Hughes also saw cryptography as a bulwark against intrusion, asserting, “we must defend our own privacy if we expect to have any.” Peirce also critiques the U.S. government’s use of the “third-party doctrine,” a legal concept allowing the retrieval of financial data from banks without a warrant. She likens it to a “sledgehammer” for financial scrutiny and argues for banking records to receive the equivalent Fourth Amendment protections afforded to private activity within one’s home.
Interestingly, Peirce and Hughes may diverge on this point, though perhaps not as expected. Hughes recognizes that once information is shared with a third party in a transaction, “each has a memory of their interaction” and “each party can speak about their own memory of this.” He contends, “we seek not to restrict any speech at all,” potentially implying that third parties, like banks, have the right to disclose information. This reflects the government’s third-party doctrine. However, both Peirce and Hughes fundamentally trust technology as a privacy safeguard — even if governments do not protect privacy, cryptographic tools can.
Peirce’s speech also delves into the broader implications of disintermediation enabled by blockchain. She illustrates this with historical anecdotes, such as the shift from human telephone operators to automated systems, which enhanced confidentiality by removing intermediaries. In finance, she argues, technologies like smart contracts and public blockchains can replace centralized entities, reducing the need to hand over personal data. This reduces risks from intermediaries who might mismanage or exploit information, while making services more transparent and accessible.
However, Peirce recognizes the fears these technologies provoke. Incumbent firms worry about losing business, regulators about enforceability, and law enforcement about tracking crimes. She counters that resilient players will adapt, regulations can evolve, and law enforcement has other tools at its disposal. Ultimately, she calls for a balanced approach that doesn’t stifle innovation.
Hughes’ manifesto ends with a call to action: “We must come together and create systems which allow anonymous transactions to take place.” But he adds that “for privacy to be widespread it must be part of a social contract,” requiring societal cooperation. This remains a challenge today. While most people claim to value privacy, they also support measures against money laundering and terrorism. Few embrace the radical view that privacy’s benefits outweigh its risks.
Peirce’s speech represents an extraordinary alignment between a top regulator and the cypherpunk ethos. If Hughes — whose whereabouts are unknown — were to read it, he’d likely see it as an invitation to the unconverted. As he wrote, “We the Cypherpunks seek your questions and your concerns and hope we may engage you.” In 2025, Hester Peirce has joined that “we,” bridging the gap between regulation and radical privacy advocacy.
Her words serve as a reminder that in the digital age, true privacy may depend less on government grace and more on the technologies we build.
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