SEC Commissioner Signals That Stablecoin Regulations Might ComeMay 13, 2022 6:59 pm
SEC Commissioner Hester Pierce stated that there is likely going to be tighter regulations on the crypto industry which may concern some investors due to the possibility of over-regulation.
The recent stable coin fallout involving the depegging of UST was the incident that got a lot of attention from lawmakers.
As a result, progress on regulation might be accelerated as lawmakers feel the pressure from the current markets.
Nothing good is really expected though as tighter controls by the SEC will likely stifle innovation in the industry as SEC Chair Gary Gensler still considers crypto to be considered securities.
The threat that crypto poses to the traditional banking system and financial markets has also worried many government agencies.
SEC Commissioner Calls for Accelerated Stablecoin Regulations After the UST Fiasco https://t.co/ExZw7mjwUR
— 🔺 tweetbit 🔺 (@tweetbit) May 13, 2022
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.”
There has also seemed to be more attention now on a global scale now.
Some organizations are even calling for a global crypto regulation body which seems to be interesting given that crypto and decentralization is all about giving control of assets back to the people.
Of course, it seems that such calls are far exaggerated given that perspectives on crypto differ drastically depending on the region in the world.
Pro-crypto SEC commissioner foresees faster stablecoin regulations after Terra crash https://t.co/WScYKNUppJ
— BtcMiningVolt (@btcminingvolt) May 13, 2022
Treasury Secretary Janet Yellen, responding to the recent sharp decline in the value of cryptocurrencies, said Thursday that additional federal regulation was needed to respond to the wave of speculative investment in the currency whose secrecy is an essential part of its appeal.
“We really need a regulatory framework to guard against the risks,” Yellen said of cryptocurrencies called stable coins, during a House committee hearing Thursday. Citing the rapid rise in use of digital assets, she added, “Really, we need a comprehensive framework so that there are no gaps in the regulation.”
Stable coins are a type of cryptocurrency pegged to a specific value, usually the dollar, another currency or gold. Its parity with the dollar is what, in theory, makes it stable. However, volatility in the cryptocurrency market this week challenged that premise.
Whether or not these calls for more regulation due to the UST stable coin incident actually become reality or not will likely not deter growth of the industry in the long run, but many are expecting “growing pains” at this stage.
SEC’s Hester Peirce says new stablecoin regs need to allow room for failure https://t.co/fasf5CfhIf
— Tim Kotzman (@TimKotzman) May 13, 2022
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