U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce said the stablecoin market has attracted a lot of attention over the past week, and the industry may be considering “tighter” regulation.
Senior SEC officials said this in comments made during an online discussion organized by the Official Monetary and Financial Institutions Forum (OMFIF). This is an independent central bank and economic policy think tank headquartered in London, UK.
A Reuters news report quoted SEC officials as saying that one place may “see some movement around stablecoins.” She added that this comes on the heels of events this week that have helped bring the industry to the spotlight.
Hester’s comments came from OMFIF’s annual Digital Currency Institute Symposium, whose panel also included Algorand CEO Steve Kokinos and former CFTC Chairman Timothy Massad.
Crash of UST depeg and LUNA
In fact, the cryptocurrency market was rocked this week by a sharp drop in the dollar parity of stablecoin TerraUSD (USD). The UST token fell to $0.25, down 75% against the dollar, amid rumors of a coordinated attack.
In addition to this, the decoupling of algorithmic stablecoins has driven Terra (LUNA) tokens near zero (currently at $0.01), and a flurry of selling pressure has also pushed Bitcoin prices to January 2021 lows.
With the stablecoin turmoil also causing Tether (USDT) to lose its peg earlier on Thursday, a stricter regulatory framework may indeed be “closer.”