Regulation Of Stablecoins Must Give Room For Testing
Hester Peirce, popularly known as the “crypto mom” at the SEC, has stated that the regulatory “motion” around stablecoins must allow experimentation and the possibility of failure.
Peirce has been a long-time advocate for the crypto community. While addressing an online forum on the 12th of May, the crypto advocate was asked to share more information on the Securities Exchange Commission’s steps to regulate crypto.
Peirce responded by stating that one area of the crypto industry which needs regulation is the stablecoin sector. This development is due to the recent crisis in the industry.
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Crypto mom stated;
“Stablecoin is one sector which has not received regulatory attention recently. However, there has been increased usage of stablecoins in recent months. If this sector continues to grow, is the regulatory agency thinking of forming a regulatory framework to guide the industy.”
Peirce has said that she has asked the SEC to use its regulatory authorities to offer exemptions to specific technologies. She believes that this would make it possible for significant experimentation.
According to Peirce, creating room for failure in the legislation is important because the sector is still developing, and experimentation must be done to see what is working. The crypto advocate is hopeful that the SEC will consider this when drawing up regulations for the sector.
Yellen Says Present Fall Of Stablecoins Cannot Affect US Economy
United States Treasury Sec. Janet Yellen noted at a Senate meeting that regulation is needed in the Stablecoin sector. This is due to the recent issue of stablecoins which have caused several individuals to lose millions of dollars.
On the 12th of May, Yellen stated that the stablecoins losing their hold on the USD would not affect the country’s financial situation. This is because stablecoins are still at a small scale and can not present such risk.
According to estimates provided by CoinGecko, the total market cap of top five stablecoins pegged to the USD is about $154 billion. This figure represents about 11 percent of the overall market value for cryptocurrencies, presently $1.36 trillion.
Peirce continued her remarks on a regulatory climate for stablecoins by stating that it is essential for regulatory agencies to keep in mind that the name stablecoin refers to several assets, including the following. She stated that;
“When you say stablecoin, you can be referring to a cryptocurrency that has nothing in common with another stablecoin. I believe that it is extremely vital to approach all discussions pertaining to cryptocurrencies with an awareness that there is a great deal of diversity. This makes it difficult to develop a legislative framework.”
She went on to say that the standards that the agency will set are not just for the present but also for the future. Crypto mom noted that preparing such a regulatory framework would not be easy.
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