SEC Commissioner Expects Tighter Regulation of Stablecoin — Yellen Says Stablecoin Doesn’t Present Real Threat to Financial Stability

A member of the U.S. Securities and Exchange Commission (SEC) expects stricter regulations on stablecoins. But Treasury Secretary Janet Yellen said stablecoins are not “a real threat” to the country’s current financial stability.

SEC Commissioner on Stablecoin Regulation

Stablecoin regulation has been a hot topic this week after the Terra failure, when the UST lost its US dollar peg and LUNA plummeted to near zero.

US Securities and Exchange Commission (SEC) Commissioner Hester Peirce spoke on cryptocurrency regulation at an event hosted by the Official Monetary and Financial Institutions Forum policy think tank in London on Thursday.

Known in the crypto community as “Crypto Mom,” Peirce said stricter regulations on cryptocurrencies, especially stablecoins, could be coming soon. She quoted:

One place we can see any movement is around stablecoins… obviously an area that has gotten a lot of attention this week.

Parliamentarians work with Ministry of Finance on stablecoin regulation

U.S. lawmakers stressed the urgent need to regulate stablecoins. In testimony before the Senate Committee on Banking, Housing and Urban Issues this week, Treasury Secretary Janet Yellen stressed the importance and urgency of Congress passing legislation on payment stablecoins.

Yellen also testified before the House Financial Services Committee this week about stablecoins:

I wouldn’t define a situation of this scale as a real threat to financial stability, but it’s growing very fast and represents the same kind of risk we’ve known for centuries with bank runs.

Both the Financial Stability Oversight Committee (FSOC) and the Federal Reserve Board have warned of the risks of stablecoin operation that threaten the country’s financial stability.

Do you think stablecoins should be regulated urgently? Let us know in the comments section below.

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Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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