Commissioner Hester Peirce — likewise called the Securities and Exchange Commission’s (SECs) “crypto mom” — has actually backed a regulative structure for stablecoins that enables “room for there to be failure.”
Speaking at an online panel on May 12 hosted by monetary think-tank the Official Monetary and Financial Institutions Forum (OMFIF) Peirce, who has actually long been a supporter for crypto, was asked to clarified the actions being taken by U.S. regulative bodies in regard to cryptocurrency.
“One place we might see some movement is around stablecoins,” Peirce addressed, “that’s a location that has actually gotten a great deal of attention today.”
“It’s been one area within crypto that’s really had quite a moment and there’s a lot of stablecoin use and therefore people are thinking down the road, if this gets even bigger do we want to have some kind of regulatory framework?”
Peirce said she’s urged the SEC to use its regulatory powers to provide exemptions to particular technologies which she says would allow for important experimentation.
“We need to allow room for there to be failure because that obviously is part of trying new things and our framework really does allow for that kind of trial and error. I hope that we will use it for that purpose.”
The depegging of the algorithmic USD stablecoin TerraUSD (UST) early this week was mentioned by officials in the U.S. Capital with United States Secretary of the Treasury Janet Yellen saying at a Senate hearing on May 10 that a “constant federal structure” on stablecoins requirements to be established because of the circumstance.
Two days in the future Thursday May 12 Yellen stated that stablecoins de-pegging from the United States dollar were not a hazard to the nation’s monetary stability as they’re not yet at a scale where a rate drop would provide a danger. Currently the marketplace capitalization of the leading 5 USD stablecoins is over $154 billion, or around 11% of the $1.36 trillion overall cryptocurrency market cap according to figures from CoinGecko.
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Speaking even more on the regulative environment for stablecoins Peirce stated that it’s important for regulators to bear in mind that the term covers a range of properties:
“You might say ‘stablecoin’ and one stablecoin might look nothing like another stablecoin. I think it’s very important to approach all the conversations in crypto with an understanding that there’s a lot of variation which makes it difficult to craft a regulatory framework.”
She included that the guidelines “try to cover what exists today” however likewise “what is going to exist tomorrow… and that’s not easy to do.”