The US Securities and Exchange Commission (SEC) confirmed that it will be actively looking at stablecoins which are digital assets pegged 1-to-1 with major world currencies such as the US dollar, British pound, the Euro, the Singapore dollar, among many others.
Nisa Amoils, a securities lawyer who closely follows the crypto and blockchain space, has noted that the SEC intends to do a “deep dive” into decentralized finance (DeFi). She also mentioned that the December 2020 statement on “special-purpose broker-dealers” has not yet been released in the Federal Register and therefore it’s possible that it “may be held up by the overall administration.”
SEC Commissioner and “Crypto Mom” Hester Peirce recently told Forkast.News in an interview that trying to regulate the nascent DeFi space will be challenging because most of the way we regulate is via third-parties — and when you truly develop decentralized platforms, then there’s really no intermediary.
Peirce also mentioned that it may be quite challenging right now for certain initiatives, and people may be looking at different ways to implement compliant solutions. However, she acknowledged that there’s no easy answer because the SEC hasn’t provided that “clarity” on how to develop solutions that follow applicable regulatory guidelines.
Peirce also believes that these issues are not only found when trying to regulate digital assets. She thinks it’s a broader problem since there’s this “open-ended” category referred to as an “investment contract” that’s supposed to capture or apply to anything that appears to be a security and acts like a security, but may not necessarily be called a stock or a bond. She pointed out that a financial instrument may be classified as one thing by another agency, but still be considered a security under the SEC’s guidelines.
It’s worth noting that the Trump administration had expressed concerns and criticized the use of Bitcoin (BTC) and other decentralized cryptocurrencies on many occasions. But even though the departure of Trump’s administration may be considered overall positive or good news for the crypto industry, it remains unclear if the Biden Administration will look at crypto-assets and blockchain tech any differently.
Some industry participants are still hopeful, though, that President Biden’s arrival will lead to positive developments for cryptocurrencies in Washington, DC.
Paul Grewal, a former federal judge and currently the Chief Legal Officer at digital asset exchange Coinbase, recently told Fortune that he’s quite optimistic about stablecoins, which recently managed to receive a major stamp of approval from the top US banking regulator. Grewal claims that stablecoins provide the “best of both worlds” in that they offer the overall efficiency of crypto-assets with the added security of government-backed money.