During a speech on regulation at the University of Missouri School of Law last week, US Securities and Exchange Commissioner, Hester Peirce, also known as “Crypto Mom”, said that United States regulators should be careful about how they approach cryptocurrency regulations. She believes the delays in creating and enforcing regulation have allowed the industry more freedom to grow and develop independently.
She said that entrepreneurs’ imaginative approaches to solving problems benefits society, and that same society welcomes those innovations “that make our lives easier, more enjoyable, and more productive”. In the financial industry, entrepreneurship and innovation do not always evoke the positive response found in other sectors, those traits “do not always face such a warm reception” in the financial world.
“Entrepreneurs trying to start something new are often much more focused on that new thing than on how it fits into a regulator’s dog-eared rulebook,” she said. “Regulators, for their part, tend to be skeptical of change because its consequences are difficult to foresee and figuring out how it fits into existing regulatory frameworks is difficult”.
Get The Regulations Right So Innovators Can Innovate
Peirce believes that “ambiguity is not all bad” and that the delays in regulatory clarity may allow “more freedom for blockchain technology to grow and projects to mature”. However, she did suggest that the industry might already be facing over-regulation, and that companies in the space have struggled to make progress because the securities laws already in existence make them “unworkable”.
She says that it is not the job of the regulators to determine the merit of any given investment opportunity but rather to ensure that they get regulations right so that innovators and entrepreneurs can spend time making better products, providing better services and revolutionizing the way we interact with one another.
“Technological progress in the financial industry offers the same mix of hope, promise, and risk that technological progress in other parts of our society offers,” she stated. “As regulators, therefore, we must allow innovation to proceed, even as we put in reasonable safeguards and watch for unanticipated consequences”.
She did emphasise that these were her own opinions and that they “do not necessarily represent those of the Securities and Exchange Commission” or her “fellow Commissioners”.