Commissioner Hester Peirce — also known as the Securities and Exchange Commission’s (SECs) “crypto mom” — has backed a regulatory framework for stablecoins that leaves “room for error.”
At an online panel on May 12 hosted by financial think tank Official Monetary and Financial Institutions Forum (OMFIF), Peirce, who has been a long-time advocate for crypto, was asked to shed light on the actions being taken be taken by US regulators in relation to cryptocurrency.
“One place we might see movement is around stablecoins,” Peirce replied, “that’s an area that’s gotten a lot of attention this week.”
“It was an area within crypto that was really having quite a moment, and there’s a lot of stablecoin use, and so in the future people are thinking, if this gets even bigger, do we want to have some sort of regulatory framework?”
Peirce said she asked the SEC to use its regulatory powers to grant exceptions to certain technologies that she believed would enable important experiments.
“We have to leave room for error because that’s part of trying new things, and our framework really allows for that kind of trial and error. I hope that we will use it for this purpose.”
The depegging of USD algorithmic stablecoin TerraUSD (UST) earlier this week was mentioned by officials in the US capital, with US Treasury Secretary Janet Yellen saying at a Senate hearing on May 10 that a “consistent federal framework” for Stablecoins are required to be developed situationally.
Two days later, on Thursday, May 12, Yellen said that the stablecoins’ depegging from the US dollar poses no threat to the country’s financial stability, as they are not yet at a level where a price drop poses a risk would. Currently, the market cap of the top five USD stablecoins is over $154 billion, or roughly 11% of the total cryptocurrency market cap of $1.36 trillion, according to CoinGecko figures.
Related: SEC and CFTC Chairs Discuss Crypto Regulation at ISDA Meeting
Peirce continued to talk about the regulatory environment for stablecoins, saying that it is important for regulators to remember that the term covers a wide range of assets:
“You could say ‘stablecoin’ and a stablecoin might not look like another stablecoin at all. I think it’s very important to approach any conversation in crypto with the understanding that there are many differences that make it difficult to create a regulatory framework.”
She added that the regulations “try to cover what exists today,” but also “what will exist tomorrow … and that’s not easy.”
https://cointelegraph.com/news/sec-s-hester-peirce-says-new-stablecoin-regs-need-to-allow-room-for-failure The SEC’s Hester Peirce says new stablecoin registrations must leave room for error