The former head of the U.S. Securities and Exchange Commission (SEC) says the best place to start regulating crypto is the stablecoin sector.
In a new CNBC interview, former SEC chair Jay Clayton discusses what regulations could look like when applied to the nascent field of crypto technology.
“I think it’s very good that the FSOC [Financial Stability Oversight Council] is getting together. Crypto assets, or digital assets, span the jurisdiction of many groups. What we’re seeing is them getting into the room and saying ‘Where is this in your arena? Where is this in my arena? Where do we need additional guidance or legislation?’ That, I think, is the first step.”
This week, FSOC released a report on crypto assets and their potential to negatively affect the stability of the traditional financial infrastructure of the US.
Given their prominence, Clayton says that stablecoins could be the “low-hanging fruit” of the industry, and that looking at the sector is the best first step for crypto regulation.
“In terms of what I say would be low-hanging fruit, bringing this technology into our traditional financial system, I do think a good first step is regulation around stablecoins. As you’ve pointed out, we’ve had some things labeled stablecoins that are anything but – you might call them unstable coins.
But if you’re going to have a digital asset that is truly pinned to the US dollar, let’s have some regulation around that. It’s very prescriptive as to what is not a security and what is truly stable. I think that’s a good first step.”