Overregulation of Cryptocurrencies Would Stifle Innovation- SEC Commissioner, Hester Peirce
With the news of stringent crypto policies hanging in the air, SEC’s commissioner has released her views on the stringent policies on crypto, saying it would slow down new technologies, thus they should be relaxed rather than stringent. Hester Pierce of the United States SEC has enjoined regulators to reconsider their decision on overregulating the crypto market. In another development, Tokenhell reported on Tuesday that the US Internal Revenue Service was clamouring for further crypto regulations.
During an interview with Financial Times, the commissioner had argued against the clamour for stricter policies on cryptocurrencies by the IRS, saying it has adverse effects on the technologies coming into the crypto and blockchain industry. The commissioner is fondly addressed as ‘crypto mum’ owing to her pro-cryptocurrency views. According to her, regulators are prone to tactless response to new market trends which often negatively affect emerging technologies. She warned that the clamour for stronger policing laws would discourage P2P transactions which is one of the perks that cryptocurrency offers. In fact, this was the basis upon which Bitcoin was created– to encourage decentralisation and get rid of third party interest (banks).
The SEC Commissioner Suggest An Alternative
As an alternative, Pierce suggested policies put in place by the industry participants themselves. Without doubt, Pierce has been pro-cryptocurrency for a long time. Perhaps it’s why she earned the name, ‘crypto mum.’ Pierce in a debate with Gary Gensler, incumbent SEC chairman, had advanced a strong case for crypto self-policing firms. Pierce is not alone in her views for crypto self-regulation. In February 2019, Brian Quintenz, CFTC commissioner had urged stakeholders in the industry to establish a self-policing structure.
Japan had already adopted the same self-policing measures, with the self-policing body on cryptocurrencies partnering with regulators in government to marshall out policies guiding the sector. Its Asian counterpart, China has gone ahead to enforce harsh policies on crypto miners in line with its carbon policy.
The call for relaxed crypto policies by the commissioner comes on the heels of attempts by the IRS to enforce stricter guidelines to regulate the sector. IRS’s head, Charles Retting had maintained that most cryptocurrencies were created to stay “off the radar” as reported by Tokenhell on Tuesday. In a meeting with the Finance committee in the US Senate, he had said he was willing to work with the congress to ensure that the crypto sector is regulated. This development had further pushed the price of Bitcoin yesterday down to $32,000. Janet Yellen, Treasury Secretary and Gary Gensler had also stated their desire to strongly supervise the market.
Joe Biden’s administration is doubling its efforts to police the crypto sector. It was also reported on Tokenhell that the US President was looking to add to the IRS’s staff strength just to ensure that the regulation attempts are achieved. The US Senate Committee on Banking will be meeting on Wednesday to discuss matters relating to a digital currency issued by the Federal Reserve.
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