In a recent interview with Bloomberg, US Securities and Exchange Commissioner Hester Peirce discussed the heated regulatory environment in the country. Peirce, who is affectionately referred to as "Crypto Mom," said that the cryptocurrency market is in its early stages,
"I think my son is still a baby."
However, she argued that she is "much more of a free country mother" than SEC Chairman Gary Gensler.
In the context of introducing a new regulator to oversee digital assets, she said,
"Personally, I don't think it's necessary."
In early October, Coinbase had proposed a set of regulatory guidelines as part of its digital asset policy proposal (dApp). One of the recommendations was the need for a "single regulator". I had argument that "will avoid fragmented and inconsistent regulatory oversight."
On the contrary, Peirce argument against in the interview. She explained,
"We have such a fragmented regulatory system for financial products and services in general that I don't know if adding another regulator would be my top preference."
Recently, the US PWG had published a report in stablecoins, expanding the powers of the SEC and CFTC. He had said that maintaining market integrity and investor protection falls under the jurisdiction of the SEC and the Commodity Futures Trading Commission (CFTC).
Having said that, the SEC Commissioner also agreed that Chief Gensler is also a "big believer" in having a "federal financial regulator of the cryptocurrency markets."
But Peirce fears that Congress won't have enough time to build a regulatory framework on that. She indicated,
“Congress has a lot on its plate ... We could do something on our own. But again there are some jurisdictional issues. "
Not long ago, CFTC Acting Chairman Behnam had sought more powers from Congress to regulate the cryptocurrency market. In this context, Crypto Mom indicated,
"The CFTC may have a different view of the jurisdiction than we do."
So Peirce's suggestion includes using the expertise of existing regulators for "mixed" supervision. She said,
“The SEC has experience in regulating retail markets. The CFTC has experience in regulating the futures markets. And obviously banking regulators have experience. "(Sic)
What will happen to DeFi?
In the interaction, Peirce argued, "decentralized finance smart contract-based transactions have a built-in regulator." So he pushed for regulations that recognize the "unique aspects of this technology."
Recently, the Financial Action Task Force of the global watchdog (FATF) also published his latest cryptocurrency guide. In the context of DeFi, Rick McDonell, former FATF Executive Secretary, said CNBC,
"The lack of effective surveillance creates a substantial risk of fraud, money laundering, sanction evasion and other criminal activity within these markets."
Other than that, Gensler had promised to bring DeFi under its regulatory umbrella in the past. Therefore, after targeting stablecoins, DeFi is likely to soon pass under the regulatory radar.
