For Peirce, there was progress, but a specific regulation is needed for new technologies.
In addition, he highlighted the potential of DeFi protocols and drew attention to the future of NFTs.
The commissioner of the United States Securities and Exchange Commission (SEC) Hester Peirce was critical of what the entity did in 2021 regarding the regulation of bitcoin (BTC) and cryptocurrencies. While “it was slight progress” having created specific work teams for certain areas related to cryptocurrencies, “we could definitely have done more,” he said.
In a interview with Coindesk, Peirce highlighted as positive that his SEC peers are “thinking about these issues to protect investors,” but he also hinted at your disagreement with what has been achieved in the past year.
For example, the official questioned the “resistance to creating a special regulation for new technologies.” Instead, he said, an attempt is being made to “forcibly fit cryptocurrencies into existing regulations,” which may undermine “the unique attributes of cryptocurrencies that are useful from a regulatory point of view.” Among these, he stressed transparency and equal conditions for all people to access them.
In April 2021, the Securities and Exchange Commission confirmed Gary Gensler as its president. This man was recognized for showing a fairly open stance to cryptocurrencies, and Peirce was looking forward to the future under his tenure, as CriptoNoticias reported in May.
However, currently the commissioner recognizes that bitcoin “is not at the center of the agenda” of the SEC, although it does have a place within it. Anyway, it details that Gensler sees most crypto assets as securities and that for this reason it has taken a more “aggressive” stance regarding their regulation.
“The SEC is trying to fit new technologies into existing laws, which are very flexible, but we need laws created especially for them.”
—Hester Peirce, SEC Commissioner—
Stablecoins, DeFi, NFT y memecoins
Beyond referring to bitcoin and the possibility of regulating it in the United States in the short term, Hester Peirce also touched on other issues inherent to the ecosystem. One of them was that of stablecoins or stablecoins, on which he considered that “it is good that there is private competition for central bank digital currencies (CBDC)”, although he stressed that it should have a regulatory framework for them in the face of their potential growth.
On the other hand, in relation to decentralized finance protocols, the official admitted that “the SEC is having difficulties dealing with cryptocurrencies in the centralized sphere, and decentralized finance will be an even greater challenge.” In this sense, he added that the DeFi deserve “a special regulatory framework” and you cannot force them to fit into the centralized model you are working on.
However, he did clarify that these platforms can be very useful for people. “I am concerned that people still do not see the potential of DeFi today and in the future, as they make access to the financial market more efficient for more people,” he said.
With regard to non-fungible tokens or NFTs, which have grown exponentially during 2021, Peirce called for “be careful” with their fractionalization, that is, their division in order to be able to commercialize parts of these tokens and not their entirety. This can offer access to them for a greater number of people, but it would also entail greater risks of scams, as is often the case when a new product is widely used.
On the other hand, Peirce He also pointed to the increasing funding of NFTs as a point to consider. In his vision, these “are valuable assets and people are looking for ways to use them to achieve their other financial goals.”
Finally, regarding the explosion of so-called memecoins such as dogecoin (DOGE) or shiba inu (SHIB), the official left a reflection on the SEC’s consideration of the people who make up the cryptocurrency market. “Memecoins are fine if people are aware that there are risks. Sometimes we treat investors as if they were children, but in reality many of them know exactly what they are doing ”.