A top official at the U.S. Securities and Exchange Commission (SEC) anticipates stablecoin regulation will accelerate after two large-cap crypto assets lost tens of billions of dollars earlier this month.
In an interview with CNBC at the DC Blockchain Summit in Washington DC, SEC Commissioner Hester Peirce says that after the collapse of the TerraUSD (UST) algorithmic stablecoin and the affiliated Terra (LUNA), she hopes any forthcoming regulation doesn’t strangle the entire crypto space.
“I think it is likely that we’re going to have regulation happen faster because of the events of recent weeks. But stablecoin legislation was already on the docket, and so it’s possible that will move forward more quickly.
I think what we have to make sure to do though is preserve the ability of people to experiment with different models and do so in a way that fits within regulatory guard rails.”
When it comes to what roles the federal government ought to play regarding crypto regulation, Peirce hopes Congress will lay out guidelines for both the SEC and the Commodity Futures Trading Commission (CFTC).
“The SEC is already acting and using the authority that it has, but I do think it would be helpful if Congress came in and said, ‘SEC, here’s the role we think you should be playing, CFTC here’s the role for you.’
One could argue that the SEC would be a good regulator of retail exchanges if we decide to have a federal regulator, but again that’s really up to Congress to make that call.
But there’s a lot of work to be done even within our existing authorities because traditional financial institutions want to get involved in crypto and they need guidance from us. They need regulatory clarity from us in order to do that.”
Peirce says she’d like to see a balance between innovation and regulation where both parties meet and communicate in good faith, adding that so far the government’s efforts to do so have been lacking.
“We talk a lot about responsible innovation, but I think we have to also talk about responsible regulation alongside that, and that means that as regulators we have to be willing to engage with the innovators and figure out, ‘Here are our regulatory objectives that we’re trying to achieve, how can we achieve those and still allow you to try out this new product or service and see whether the market likes it?’
That means that it requires work on our part and we have to be willing to do that work, and I haven’t seen us willing to do that work so far. I’m hopeful that the next phase is going to be us sitting down and thinking realistically about the potential for this technology, the challenges and the opportunities from a regulatory standpoint, but also from an innovation standpoint.”
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