U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has revealed that Terra’s UST crash could soon develop stricter rules for cryptocurrency stablecoins.
According to Reuters reportOn 12 May, Pierce commented on progress in an online discussion hosted by the London-based Official Monetary and Financial Institutions Forum (OMFIF) policy think tank.
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When asked about cryptocurrency oversight, Pierce said that stablecoins will be the first sector to be regulated in light of the UST collapse.
that [stablecoins] It’s definitely an area that’s been getting a lot of attention this week.
Commissioner Hester Peirce is taking a more constructive strategy on regulation. She acknowledges the need for rules and favors innovative approaches to rules.
There are many potential options for accessing stablecoins… And experimentation must allow room for failure.
She also noted the opportunity for the SEC to have a technology platform that could be traded under the SEC’s broad rulemaking powers with virtual currencies.
Flashing under SEC regulations
In the United States, it takes a long time for new rules and regulations to take effect. So far, there have been no specifics on the rules for stablecoins, but this week’s UST-related events could speed things up.
However, there is a lot of speculation that these regulations will continue to worsen the digital currency market and curb improvement. For example, SEC head Gary Gensler considers digital currencies and stablecoins to be a risk to the bond market and the financial industry.
In one of his crypto statements last year, Gensler compared stablecoins to the gambling tools of old-fashioned casinos.
Gensler explanation A stablecoin as a poker chip in the “wild west” of the crypto industry. He added;
There are many casinos here in the Wild West and poker chips are these stablecoins on the casino gaming table.
This week, U.S. Treasury Secretary Janet Yellen also spoke about a “proper” regulatory framework resulting from a clash between the UST and a Senate banking panel. She also said that the current situation in the cryptocurrency space proves the need for regulation of the universe.
As in March, President Joe Biden issued an executive order. Directs governments to estimate the risks and benefits of establishing a central bank for digital and other cryptocurrency issues.
Ashley Alder, chairman of the International Organization of Securities Commissions (IOSCO) and the International Monetary Fund (IMF) should also line up to establish crypto rules. They believe that uniform regulation of industry is needed worldwide.
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Ashley Alder, Chairman of IOSCO, said:
Looking at the risks we need to address, there are several, and there is a wall of concern (cryptocurrency) in the institutional dialogue.
Therefore, Hester Peirce proposes a more pragmatic approach to regulating stablecoins: “trial and error.”
Featured image from Pixabay, and chart from Tradingview.com