Cryptocurrencies remains highly unregulated in most parts throughout the globe and is one of the factors holding back the growth and mass adoption of digital assets.
Similarly, in the United States, the Securities and Exchange Commission (SEC) has been involved with cryptocurrencies but is quite slow in giving guidance. However, “Crypto Mom” and SEC commissioner Hester Peirce believes the regulator can become more open to change.
In a recent interview, Commissioner Peirce often referred to as “Crypto Mom” for her advocacy of economic freedom, and hence, cryptocurrencies and blockchain, believes the SEC’s conservative attitude towards cryptocurrencies need to change as the tech gains popularity and more people get into the market.
“While we’ve been very slow in giving guidance, there is more and more interest from a wide spectrum of people, both inside the crypto space as well as inside the traditional financial institutions who are asking us for guidance. So I think we’re going to be forced to confront that more and more in the coming years.”
She added that the crypto industry is a space that will continue to gain popularity and draw in a larger percentage of the population. She had this in mind and, hence, wanted to come back for another term at the SEC, to make the regulator more open towards innovation.
The commissioner hopes that the SEC would become friendlier towards innovators in this space and issue the much guidance in the future to help them “move forward with innovation and entrepreneurship.”
DeFi will be a challenge for the regulators
Peirce is also aware that the market for decentralized finance is also booming, and she spoke about the various regulatory challenges this fairly new market can face, at the two-day (virtual) LA Blockchain Summit.
She believes that the DeFi space has “some real potential”, and is in favor of the idea of a user of something being able to “govern it in a very direct way”. According to her, this governance feature of DeFi would “challenge the regulatory structure in a number of ways.”
“I think when you have the people who are actually using something deciding its future, then the changes that happen are decided by the community together. And that’s a sort of regulatory function. It’s not a government regulatory function, but it’s a regulatory function by the people who are actually using it,” said Commissioner Peirce.
“But if you really launch it and put it in the hands of your community, it could end up doing and being something very different than what you initially imagined it to be. It could ultimately be very different. So you have to have a little bit of willingness to be hands-off and see what happens. And that’s probably a little bit scary for some developers to do that, but I think it’s kind of an interesting thing to watch.”
Peirce was re-elected as the SEC commissioner in August. Following her re-election, she has expressed her interest in modifying existing crypto regulations to make it easier for Americans to access regulated cryptocurrency markets.