US SEC Commissioner Hester Peirce: New Stablecoin Regulations Need to Allow Room for Failure

U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce, known as "Crypto Mom," supports the development of a regulatory framework for stablecoins that allows "room for failure."

Peirce, a longtime advocate for cryptocurrencies, was asked to clarify what U.S. regulators are doing when it comes to cryptocurrencies, when she spoke at an online roundtable discussion hosted by financial think tank The Official Forum of International Monetary and Financial Institutions (OMFIF) on May 12. action taken.

“We’ll probably see some action around stablecoins,” Peirce replied, “which is an area that’s getting a lot of attention this week.”

“It’s a really important area in the crypto industry, there’s a lot of adoption of stablecoins, so people are thinking, if this space gets bigger, do we want to have some sort of regulatory framework?”

Peirce said she has urged the U.S. SEC to use its regulatory powers to provide exemptions for specific technologies, which she said would allow important experimentation.

"We need to allow room for failure because that's obviously part of trying new things, and our framework does allow for that trial and error. I hope we can use it for that."

Earlier this week, U.S. officials referred to the de-anchoring of the algorithmic U.S. dollar stablecoin TerraUSD (UST), which U.S. Treasury Secretary Janet Yellen said at a Senate hearing on May 10. situation, a "coherent federal framework" for stablecoins needs to be developed.

Two days later, on May 12, Yellen said that stablecoins de-pegged from the dollar would not pose a threat to financial stability in the United States because they had not yet reached a scale where falling prices would pose a risk. According to data from CoinGecko, the top five U.S. dollar stablecoins currently have a market capitalization of more than $154 billion, accounting for about 11% of the total cryptocurrency market capitalization of $1.36 trillion.

Speaking further on the regulatory environment for stablecoins, Peirce said it is important for regulators to remember that the term encompasses a wide variety of assets:

"You might say 'stablecoin,' and one stablecoin might look completely different from another. I think it's really important, when dealing with all the crypto conversations, to understand that there's a lot of variation and that's making it difficult to develop 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 to do."

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