SEC's Hester Peirce says new stablecoin regs need to allow room for failure

cointelegraph.com:

Commissioner Hester Peirce — also known as the Securities and Exchange Commission’s (SECs) “crypto mom” — has backed a regulatory framework for stablecoins that allows "room for there to be failure."

Speaking at an online panel on May 12 hosted by financial think-tank the Official Monetary and Financial Institutions Forum (OMFIF) Peirce, who has long been an advocate for crypto, was asked to shed light on the actions being taken by U.S. regulatory bodies in regard to cryptocurrency.

“One place we might see some movement is around stablecoins,” Peirce answered, “that's an area that has gotten a lot of attention this week."

Peirce said she’s urged the SEC to use its regulatory powers to provide exemptions to particular technologies which she says would allow for important experimentation.

The depegging of the algorithmic USD stablecoin TerraUSD (UST) early this week was mentioned by officials in the U.S. Capital with United States Secretary of the Treasury Janet Yellen saying at a Senate hearing on May 10 that a "consistent federal framework” on stablecoins needs to be developed in light of the situation.

Two days later on Thursday May 12 Yellen said that stablecoins de-pegging from the US dollar were not a threat to the country’s financial stability as they're not yet at a scale where a price drop would present a risk. Currently the market capitalization of the top five USD stablecoins is over $154 billion, or around 11% of the $1.36 trillion total cryptocurrency market cap according to figures from CoinGecko.

Related: Chairs from the SEC and CFTC talk crypto regulation at ISDA meeting

Speaking further on the regulatory environment for stablecoins Peirce said that it’s important for regulators to remember that the term covers a