Commissioner Hester Peirce, dubbed the “crypto mom” by the Securities and Exchange Commission (SEC), has endorsed a regulatory framework for stablecoins that allows for “failure.”
Peirce, who has long been a supporter for cryptocurrencies, was requested to speak at an online panel held by financial think-tank the Official Monetary and Financial Institutions Forum (OMFIF) on May 12 to shed light on the activities being taken by US regulatory organizations in reference to cryptocurrency.
“One place we might see some movement is around stablecoins,” Peirce answered, “that’s an area that has gotten a lot of attention this week.”
Peirce has encouraged the Securities and Exchange Commission to use its regulatory authorities to grant exemptions to specific technologies, which she claims would allow for important experimentation.
The depegging of the algorithmic USD stablecoin TerraUSD (UST) earlier this week was brought up by officials in Washington, with US Secretary of the Treasury Janet Yellen remarking at a Senate hearing on May 10 that a “consistent federal framework” on stablecoins is needed in light of the circumstances.
On Thursday, May 12th, Yellen stated that stablecoins de-pegging from the US dollar do not pose a threat to the country’s financial stability because they are not yet at a scale where a price decline would be dangerous.
According to CoinGecko, the market capitalization of the top five USD stablecoins is currently over $154 billion, or roughly 11% of the $1.36 trillion global cryptocurrency market size.
When it comes to the regulatory framework for stablecoins, Peirce emphasizes the importance of regulators remembering that the term encompasses a wide range of assets.
She went on to say that the rules “attempt to cover what exists today” as well as “what will exist tomorrow… and that’s not easy to do.”
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