Speaking on the topic of cryptocurrency regulation, U.S. Securities and Exchange (SEC) Commissioner Hester Peirce says the crypto space requires some leeway for innovation.
SEC Shouldn’t Stifle Cryptocurrency Innovation
Speaking during the Bakkt Digital Asset Conference, ‘crypto mom,’ as Peirce is affectionately dubbed within the industry called on regulators to allow room for digital innovation.
According to Peirce, actors like the SEC should move away from being “merit regulators” and allow market participants to decide whether a particular asset is worthy of investment.
Commenting further on the matter, Commissioner Peirce opined:
We need to allow people that are interested in this space [crypto] to be involved with it in a way that is within the regulated framework. Understanding that investors have to make their own decisions, we can’t make those decisions for them.
Already, there is growing discontent among some cryptocurrency businesses in the country about the patchwork of state and federal laws that often stifles blockchain innovation in America.
After delivering dire warnings about the restrictive state of U.S. cryptocurrency regulations, Circle eventually moved the Poloniex crypto exchange offshore. Other platforms are geofencing U.S. traders.
Slow to Embrace Innovation
For Peirce, the SEC isn’t quick to embrace innovation, rather preferring to maintain the status quo. Thus, the Commission attempts to use decades-old regulations to fit the emerging cryptocurrency asset class.
According to Commissioner Peirce:
It is very natural for regulators to be conservative because if we make a mistake then people are going to come blame us and I know if people lose money, they always come blame the regulator.
SEC Chairman, Jay Clayton has consistently held the view that initial coin offering (ICO) tokens are securities.
According to Peirce, this particular habit of the SEC does put the country at a disadvantage in the emerging digital economy. Other jurisdictions across Europe and Asia have already taken significant steps in claiming pole positions in the developing crypto landscape.
Crypto mom also espoused the view that in the absence of significant changes, the U.S. will fall behind these countries in terms of cryptocurrency adoption.
For Peirce, regulators should create an enabling environment for innovation and leave product testing to the market. Also, the SEC Commissioner believes that regulators should have a crypto-shepherd — divisions dedicated to balancing compliance and positive relationships with cryptocurrency projects.
Recently, U.S. Treasury Secretary Steve Mnuchin declared that regulators like the SEC will have to collaborate in developing crypto-specific laws for the country.
Do you think the crypto space needs a loosely regulated environment? Let us know in the comments below.
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