U.S. Securities and Exchange Commission (SEC) head Hester Peirce says future stablecoin regulation must leave room for “failure” amid the collapse of Terra (LUNA) this week.
While speaking at the Digital Currency Institute’s annual symposium on Thursday, Peirce predicted that stablecoin regulation could be on the horizon.
“I think one place… We could see movement around stablecoins. It’s an area that’s obviously gotten a lot of attention this week, but I think more generally it’s an area within crypto that’s really had a good time, and there’s a lot of use of stablecoins and so people are thinking down the road if it becomes even more important do we want to have some sort of regulatory framework. Some people have suggested it should be at the SEC. Other people want it to be at the level of banking regulators, so there are various potential options for approaching stablecoins.
Peirce, a well-known crypto proponent, says that one term can cover very different types of assets, explaining that there can be huge variations between stablecoins. She notes that regulating crafting is difficult because it must cover the varied offerings of stablecoins that exist today, as well as any potential technology that may exist in the future.
“What I urged us to do at the SEC is to use our regulatory tools that we have, which allow us to provide exemptions to our existing rules tailored to a particular technology, and so we could do that and this would allow for iteration and experimentation, which I think is really important at the start of any technology.
And with experimentation, I should just say that we have to allow room for failure as well, because that’s obviously part of trying new things. And our framework really allows for that kind of trial and error, and hopefully we’ll use it for that purpose.
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