The official said that she was open to dialogue with developers and other players in the DeFi ecosystem. She acknowledges that it is not possible to use regulation to prevent DeFi from developing.
Hester Peirce said that they “need to provide clarity on regulations for people who are trying to develop on these networks.” This notary of the US Securities and Exchange Commission (SEC) was referring to the decentralized finance (DeFi) ecosystem.
This is how the lawyer expressed herself during a discussion on global finance, which included the issue of DeFi protocols. She talked to several experts, among who were representatives of the Bank for International Settlements (BIS).
The official said that she is willing to speak with DeFi protocol developers to hear their positions. She even invited them to talk to her and tell her how they could regulate the use of technology.
It is not possible to use regulation to prevent decentralized finance from developing, the SEC official acknowledged. She explained that it is necessary “to find ways to interact with this technology”, in conformity with legal regulations and standards.
Regulations Should Allow Citizens to Make Suitable Decisions
According to Peirce, regulations are relevant, and developers need to understand this. She stated that they should know that the regulatory work is valuable to them. She added that it can allow them to become part of the growth in this area of the economy.
The lawyer asked her colleagues from other state agencies to “go back to basics” and establish a good regulatory framework. She said that it should allow the citizens that they regulate to interact with each other, through mutually beneficial transactions.
Peirce added that the role of regulators was not to intervene and make decisions for people. She explained that they should establish a regulatory mechanism within which people can make the decisions that best suit themselves.
Peirce has talked similarly about cryptocurrencies and the industry around them on other occasions. This official takes a critical position on the strict regulatory policies of the SEC on the approval of a Bitcoin exchange-traded fund (ETF). She said that adding too many regulatory requirements “is unfair to innovators.”
Regulators Should Not Hurt Investors or Stifle Innovation
“It is true that regulators must understand and analyze new asset classes and technologies. However, excessive conservatism can hinder competition, distort the market, and hurt investors,” said SEC Commissioner Hester Peirce.
Among her listeners were Joseph Lubin, founder of ConsenSys; Sheila Warren, from the executive committee of the World Economic Forum; and David Puth, CEO of Centre. Jon Frost, an economist from the Bank for International Settlements moderated the debate.
All of them agreed with her that state regulations are necessary for the development of the DeFi ecosystem. The same as Peirce did, they argued in favor of a regulatory framework that does not stifle innovation but rather provides space for development.
By Alexander Salazar
