DeFi will provide good regulatory test for SEC, says Commissioner Peirce
The SEC commissioner described the DeFi space as “a work in process” but overall “alluring.”
Get best and latest bitcoin news today with coinsurges.
Hester Peirce, commissioner for the U.S. Securities and Exchange Commission and known by the nickname “Crypto Mom,” welcomes the challenge of regulating DeFi.
In a speech for a George Washington University Law School event on the digital economy, Peirce said decentralized finance, or DeFi could be the alternative legacy financial system many are seeking given the surge in anti-Wall Street sentiment surrounding the short squeeze of GameStop stocks. The SEC Commission said the technology could provide a “very good test” for the regulatory body in protecting investors and markets.
“Although a work in progress with all the growing pains and rough edges that implies, DeFi’s promises of democratization, open access, transparency, predictability, and systemic resilience are alluring,” said Peirce. “We regulators, mindful of the potential upsides and downsides, need to provide both legal clarity and the freedom to experiment so that DeFi can compete with CeFi to offer investors financial services.”
Peirce added that the SEC should be looking at ways to ensure that the markets are inclusive, given the frustration many have expressed starting with the 2008 financial crisis but most recently over the GameStop trades. She said the commission should be “more proactive in embracing technology” to make the economy work better for more people.
Note: Check breaking stories and Latest Cryprocurrency News with coinsurges.
“The digital economy does pose some new regulatory challenges, but it also gives us new tools to meet those challenges. We should use those tools with genuine care for the freedom of the people we regulate.”
The commissioner has previously said that DeFi has created new challenges for the SEC for a number of unresolved legal issues. Though it’s likely some projects in the space will fall under securities laws, there are many DeFi offerings consisting of tokens that lack liquidity and used to fund blockchain projects. She cautioned developers to speak with the SEC if the project “looks like the traditional security.”
Related: Coins Marketcap