Rules defining the use of cryptocurrencies, including, should be as clear as possible, and that is something the U.S. Congress could help develop, according to the U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce.
"Crypto is an area where I've been calling for us to take steps to regulate the market, to put out clear rules about what people need to do," she said in an interview with Bloomberg on Thursday.
According to "Crypto Mom," the nickname the crypto community has given Peirce for her strong support for the industry, stablecoins may or may not be within the SEC's jurisdiction, "but facts and circumstances matter, but it's something that the Congress has been looking at."
"Congress may well weigh in, and I think that the events of last week are likely to encourage them to work more quickly on it," said Peirce.
US Securities and Exchange Commission Commissioner Hester Peirce says she wants to see clear rules about using cryptocurrencies and stablecoins.
— Bloomberg Crypto (@crypto) May 20, 2022
For the crypto industry, which shed more than $300 billion in the past ten days, the consequences of the Terra collapse are likely to have a long-lasting effect, especially when it comes to investor confidence.
When asked what she thinks about the jurisdictional division between the SEC and the Commodity Futures Trading Commission (CFTC), which oversees the derivatives market, Peirce said that some of those aspects are indeed unclear, and "that's why Congressional input would be quite helpful."
Still, there are areas where regulatory clarity should be provided by the SEC, added Peirce, pointing to broker-dealers or investment advisors who "want to interact with crypto" as an example.
Crypto regulations coming to the fore
As the events surrounding Terra unfolded, more regulators turned their attention to cryptocurrencies and stablecoins.
During a congressional hearing last week, U.S. Treasury Secretary Janet Yellen pointed to the collapse of Terra as an example of "rapidly growing risks"—though she later clarified that cryptocurrencies, on the whole, don't pose any systemic risk to the financial system.
CFTC chairman Rostin Behnam has meanwhile stated that the growing number of crypto-related fraud and manipulation cases requires more resources from regulators.
Speaking at an event in New York on Wednesday, Behnam urged "to continue to advocate and support regulatory obligations that will make these markets more transparent, safer, and resilient."
The CFTC chairman also stressed that "crypto markets present unique characteristics that would benefit from the federal market oversight."