US Securities and Exchange Commission (SEC) official Hester Peirce says future stablecoin regulation needs to allow room for “failure” amid the collapse of Terra (LUNA) this week.
While speaking at the annual Digital Monetary Institute Symposium on Thursday, Peirce predicted that stablecoin regulation could be on the horizon.
“I think one place… We might see some movement is around stablecoins. That’s an area that obviously this week has gotten a lot of attention, but I think more generally, it’s been one area within crypto that’s really had quite a moment, and there’s a lot of use of stablecoins and therefore, people are thinking down the road if this gets even bigger, do we want to have some kind of a regulatory framework. Some people have suggested that it should be at the SEC. Other people want it to be at the banking regulators, so there are different potential options for approaching stablecoins.”
Peirce, a noted crypto supporter, says that one term can cover very different types of assets, explaining that there can be huge variations among stablecoins. She notes crafting regulation is difficult because it needs to cover the varied offerings of stablecoins that exist today, as well as any potential technology that could exist in the future.
“What I’ve urged us to do at the SEC is to use our regulatory tools that we have which allow us to provide exemptions from our existing rules that are tailored to a particular technology, and so we could be doing that and that would allow for iteration and experimentation, which I think is really important at the outset of any technology.
And with experimentation, I should just say we need to allow room for there to be failure as well because that obviously is part of trying new things out. And our framework really does allow for that kind of trial and error, and I hope that we will use it for that purpose.”
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