The former chairman of the U.S. Securities and Exchange Commission (SEC) believes the stablecoin market is the ideal location to begin crypto regulation.
In a recent interview with CNBC, former SEC chairman Jay Clayton examines how laws may be applied to the emerging sector of crypto technology.
“I believe that the formation of the FSOC [Financial Stability Oversight Council] is a really positive development. Crypto assets, or digital assets, fall under the authority of several organizations. Where is this inside my domain? Where is more advice or legislation required?’ I believe that is the first step.”
This week, the Financial Stability Oversight Council (FSOC) issued a study on crypto assets and their possible detrimental impact on the US’s conventional financial system.
Given their prevalence, Clayton said that stablecoins may be the “low-hanging fruit” of the industry and that examining the sector is the ideal starting point for crypto regulation.
“Regulating stablecoins is an excellent first step toward integrating this technology into the conventional financial system, which is what I consider to be the low-hanging fruit. You’re right that there have been “stablecoins” that were really rather unstable.
Let’s have certain rules in place for a digital currency that is tied to the dollar, though. The definitions of what is not a security and what is actually steady are fairly specific. I believe that is a positive beginning step.”