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SEC Commissioner Hester Peirce has cautioned authorities against overzealous regulation of cryptocurrencies in the US, adding that further actions against the market could stifle innovation. Peirce serves as one of the five commissioners on the US Securities and Exchange Commission and is also known as “Crypto Mom” for her supportive stance on the crypto sphere.
Regulation for Cryptocurrencies Should be Led by the Industry
In an interview with The Finacial Times, Peirce urged fellow regulators and authorities to exercise restraint in their approach to the crypto market. She emphasized that the crypto sphere needs a subtle approach and suggested that regulators feel an inherent sense to regulate any market space that is still emerging. “I am concerned that the initial reaction of a regulator is always to say ‘I want to grab hold of this and make it like the markets I already regulate’,” Peirce said.
The SEC commissioner underlined that an industry-led framework on regulations might be the need of the hour. Peirce also added that a stringent set of laws could prevent investors and others in the market from carrying out peer-to-peer transactions. She also indicated that government interference could be detrimental to innovation.
Peirce has been a longtime supporter of cryptocurrencies. In March 2019, she debated the incumbent chairman of SEC, Gary Gensler, and pushed for crypto self-regulation.
Peirce not Alone in Support for Self-Regulation
Like Peirce, Commodity and Futures Trading Commission Commissioner Brian Quintenz has advocated for industry participants to come together and create a self-regulatory framework.
Currently, Japan leads the world in terms of crypto self-regulation. In 2020, the country’s Financial Services Agency recognized two self-regulatory organizations (SROs) to monitor its crypto trading scene.
Peirce’s appeal for self-regulation comes as authorities in the US adopt a stricter view on cryptocurrencies. On Tuesday, the Internal Revenue Service chief Charles Rettig asked members of Congress for authority to collect cryptocurrency data. In May, the Treasury Department announced that it’s working on a proposal that will make it mandatory for crypto service providers to report transactions exceeding $10,000.
The US is also working on the development of its own digital currency, which is expected to be discussed in the Senate Banking Committee on Wednesday. The committee may broaden its discussion to include issues concerning the crypto sphere.