SEC commissioner signals movements on stablecoin regulation
Hester Peirce, the commissioner at the US Securities and Exchange Commission (SEC), said that "one place we might see some movement is around stablecoins," when asked about cryptocurrency regulation during an online panel debate hosted by the London-based Official Monetary and Financial Institutions Forum policy think tank, according to Reuters.
Stablecoins, or tokens that are pegged to a non-crypto asset, typically the US Dollar, have been under the spotlight after the fall in valuation for TerraUSD (UST) and its parent company's coin Terra Luna (LUNA) in the last few days.
UST's big flaw in the eyes of the market is that it is backed by an algorithmic formula based on LUNA. With both falling in valuation by over 90 percent recently, it has created a spiral that has broken the stablecoin's theoretical resistance to volatility.
Other stablecoins, such as Tether (USDT) and USD Coin (USDC), claim to have the actual dollars and other assets backing their tokens. However, USDT has also shown fluctuations in its price, as investors start to question if Tether has the assets to back up the third-largest crypto by market capitalisation in the world.
Peirce was recently in the news by questioning the SEC's decision to hire 20 new employees to combat crypto fraud, saying that the SEC is supposed to be "a regulatory agency with an enforcement division, not an enforcement agency."