The U.S. Securities and Exchange Commission’s Valerie Szczepanik is optimistic that regulation will ultimately boost the cryptocurrency market.
“I do think if we hope to smell the crypto spring in the air, it will take people walking with the regulators,” Szczepanik, the SEC’s senior advisor for digital assets, told a crowd Friday at SXSW in Austin, Texas. “But I do think the spring is going to come.”
In a Q&A session with attorney Daniel Kahan of Morrison & Foerster LLP, Szczepanik emphasized how the regulatory approach at the SEC is designed to let innovation flourish, though it comes at the cost of not providing completely clear guidelines for new kinds of businesses.
“The lack of bright-line rules allows regulators to be more flexible,” she said.
While respecting the desire from entrepreneurs to know whether they can or can’t run a business in full compliance with current securities laws, she said the principles-based approach allows more opportunities to arise from new technology.
She told attendees:
“I think if you were to propose a new regime of regulations in a precipitous way without really studying it, you might end up steering the technology one way or another.”
When asked for her thoughts on the rise of stablecoins, Szczepanik noted that there as several arrangements that allow these tokens to maintain a relatively stable price relative to other assets.
She singled out stablecoins that create two assets – one that maintains a fixed price and the other whose value fluctuates in order to help the first token’s price stay fixed (often referred to as algorithmic stablecoins).
With regard to that particular category of project,