The U.S. Securities and Exchange Commission (SEC), commissioner Hester Peirce, popularly known as “crypto mom,” signaled that SEC could develop stricter rules around crypto stablecoins soon due to the Terra’s UST crash incident.
According to Reuter’s report, on May 12, Pierce commented on the progress in an online discussion hosted by the London-based Official Monetary and Financial Institutions Forum (OMFIF) policy think tank.
Related Reading | South Korea Plans Crypto Legislation By 2024, Leaked Report
When asked about cryptocurrency supervision, Pierce said that stablecoins are likely to be the first sector to be regulated in light of the UST crash.
That’s [stablecoins] an area that has obviously this week gotten a lot of attention.
Commissioner Hester Peirce is taking a more constructive strategy toward regulation. She admits the need for rules and favors an innovative approach towards it.
There are different potential options for approaching stablecoins…and with experimentation, we need to allow room for there to be a failure.
In addition, she commented on the opportunity that the SEC has a chance to capture virtual currencies and the technology platforms where they can be traded under the agency’s broad rulemaking authority.
Flicker At Regulations From SEC
In the United States, it takes a long time for new rules and regulations to go into effect. So far, there has been nothing specific about the stablecoin rule, but it may now accelerate things because of this week’s events regarding UST.
Bitcoin is trading at around $30,000 with a .6% increase | Source: BTC/USD price chart from Tradingview.com
However, there are many speculations that these regulations would continue to deteriorate the digital currencies market and suppress improvement. For example, SEC head Gary Gensler considers digital currencies and stablecoins dangerous for the bond market and financial industry.
In one of last year’s statements about crypto, Gensler has compared stablecoins to the tools for gambling at old-timey casinos.
Gensler described stablecoins as poker chips in the “wild west” of the crypto industry. He added;
We’ve got a lot of casinos here in the Wild West, and the poker chips are these stablecoins at the casino gaming tables.
This week, U.S. Treasury Secretary Janet Yellen also talked about the “appropriate” regulatory framework due to the crash of the UST with the Senate banking panel. In addition, she said that the current state of events in the crypto sector proves a need for regulations in space.
As well as in March, President Joe Biden issued an administrative order directing the government to estimate the hazards and benefits of creating a central bank for digital and other cryptocurrency issues.
The International Organization of Securities Commissions (IOSCO) chairperson Ashley Alder and the International Monetary Fund (IMF) are also in line, making it necessary to establish crypto rules. They think there is a need for uniform regulation of the industry worldwide.
Related Reading | Norwegian Crypto Miners Rejoice As Proposed Ban Rejected
IOSCO’s chair Ashley Alder stated that;
If you look at the risks we need to address, they are multiple, and there is a wall of worry about this (crypto) in the conversations at an institutional level.
Therefore, a more practical approach, “trial and error,” is suggested by Hester Peirce to regulate stablecoins,
Featured image from Pixabay, and chart from Tradingview.com
Go to Source
Author: Naveed Iqbal