A commissioner with the U.S. Securities and Exchange Commission (SEC) expects to see stricter regulation on stablecoins. However, Treasury Secretary Janet Yellen says stablecoins are currently “not a real threat” to the country’s financial stability.
SEC Commissioner on Stablecoin Regulation
Stablecoin regulation has been a hot topic this week following the Terra fiasco which saw UST lose its peg to the US dollar and LUNA plunge to near zero.
A commissioner with the U.S. Securities and Exchange Commission (SEC), Hester Peirce, talked about cryptocurrency regulation Thursday during an event hosted by the London-based Official Monetary and Financial Institutions Forum policy think tank.
Peirce, known in the crypto community as the “crypto mom,” indicated that tougher regulations on cryptocurrency, especially stablecoins, may be coming soon. She was quoted as saying:
One place we might see some movement is around stablecoins … That’s an area that has obviously this week gotten a lot of attention.
Lawmakers to work with Treasury Department on stablecoin regulation
US lawmakers have stressed the urgent need for stablecoin regulation. In testimony before the Senate Banking, Housing, and Urban Affairs Committee this week, Treasury Secretary Janet Yellen stressed the importance and urgency of Congress passing legislation governing payment stablecoins.
Yellen also testified before the House Financial Services Committee this week, stating that for stablecoins:
I would not characterize them on this scale as a real threat to financial stability, but they are growing very rapidly and they present the same type of risks that we have known for centuries with regard to bank runs.
Both the Financial Stability Oversight Council (FSOC) and the Federal Reserve Board have warned about the risks of stablecoin runs that threaten the country’s financial stability.
