In overseeing stablecoin issuers, it is necessary to preserve certain exemptions to continue innovation. This was stated by Securities and Exchange Commission Commissioner Hester Peirce.
We need to leave room for failures, which are part of experiments. Our rules accommodate them, and I hope this will continue. — she said.
Peirce explained that stablecoins can have varying natures, which makes it difficult to design a regulatory framework. In her words, the rules ‘seek to cover what exists today,’ but also ‘what will exist tomorrow, and that is not easy to do’.
On May 10, at hearings of the Senate Banking Committee, the depegging of the UST from the US dollar and the collapse of the algorithmic stablecoin’s related cryptocurrency LUNA were discussed. Treasury Secretary Janet Yellen emphasised the need to pass legislation regulating stablecoins by the end of 2022.
Two days later the official explained that the current scale of the project is not large enough to pose a serious threat.
Earlier, calls for tougher oversight of stablecoin issuers were urged by SEC Chair Gary Gensler and Federal Reserve Chair Fed. The tightening of their regulations received backing from Michael Hsu, head of the OCC within the U.S. Treasury.
As reported, CTO Paolo Ardoino of Tether warned about the dangers of algorithmic stablecoins for the market as their capitalization grows.
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