SEC Commissioner Calls for Accelerated Stablecoin Regulations After the UST Fiasco
SEC Commissioner Hester Peirce has signaled that regulations for stablecoins could be nearing following the fallout of the Terra ecosystem collapse.
Peirce, also affectionately known as ‘Crypto Mom,’ said that there might soon be movement on stablecoin regulations in the U.S. The comments came at an online panel debate hosted by the London-based Official Monetary and Financial Institutions Forum (OMFIF) policy think tank on May 12.
“One place we might see some movement is around stablecoins,” she said in reference to tighter regulations for the crypto sector. Talking about the collapse of the TerraUSD stablecoin, she added, “that’s an area that has obviously this week gotten a lot of attention.”
The SEC has an opportunity to “capture digital currencies, and the technology platforms where they are traded” under its jurisdiction, she added, according to Reuters.
Stablecoin Fallout Troubles Lawmakers
The wheels of bureaucracy and regulation turn very slowly in the United States, and nothing specific has been detailed regarding an approach to stablecoin regulation. However, in light of this week’s events regarding UST, things may now be accelerated.
Nothing good is likely to come out of tighter controls over crypto as SEC Chain Gary Gensler still considers them as securities. He believes stablecoins and crypto pose a threat to money markets and the banking sector, so they should come under the same controls that they have.
U.S. Treasury Secretary Janet Yellen is also pushing for more stringent regulations for digital assets. This week she told a Senate banking panel that the current market turmoil illustrated the need for an “appropriate” regulatory framework.
Hester Peirce has taken a more productive stance suggesting a “trial and error” approach to regulating stablecoins, stating:
“There are different potential options for approaching stablecoins…and with experimentation, we need to allow room for there to be failure.”
Calls for Global Crypto Regulation Body
In a related regulatory development, a senior official has called for a joint body to regulate cryptocurrencies on a global scale.
At the same OMFIF conference, chair of the International Organization of Securities Commissions (IOSCO) Ashley Alder said:
“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,”
He added that a global group to align crypto rules was clearly needed, comparing such an organization to groups already operating for climate change or Covid-19.
“But I do think now it’s seen as one of the three C’s (COVID, climate, and crypto) so it’s very, very important. It has gone up the agenda, so I would not expect that to be the case the same time next year,” he stated.