As the DeFi market continues to be popular, some US SEC commissioners have accepted interviews and expressed their views on decentralized finance (DeFi).
The current DeFi boom has not caused much attention and sensation in the US Congress. But the US SEC has already paid attention to DeFi. SEC Commissioner Hester Peirce said in an interview that DEFI regulation will not be the top priority this week, but in 2020, she and other SEC members are paying close attention to the prosperity The development of DeFi and the imminent regulatory challenges it may bring.
Compared with other committee members, Peirce has long been uniquely interested in the crypto ecosystem and the wide-ranging impact of Crypto assets. In her speeches and regulatory recommendations, she has always expressed a desire to protect innovation, but not to make innovation out of control and hurt investors.
She said that DeFi has brought this balancing act to new heights. She has learned how many Crypto asset projects work, but she admits that there is still a long way to go for DeFi education. Peirce said: “I think some of DeFi’s activities will help me try to define more of the meaning of decentralization.” In her view, these projects seem to be trying to complete what appeared during the IC0 boom in 2017. Many projects have different things. Specifically, the DeFi revolution seems to have a broader agenda than IC0.
“At IC0, people are thinking,’Can I build a network?” For example, in the case of Telegram, the goal is to build a network and build a currency that can work effectively in that network. And I think What DeFi is trying to do is not so easy to categorize,” Pierce said.
Regulators have been paying attention to the DeFi field and are aware of recent growth, but in a year, with so many unprecedented incidents, the popularity of new DeFi projects is not the most eye-catching. She said, “This (the rise of DeFi) is a big deal, but it is still relative.” “So if it becomes larger and more influential, then I think it will see more regulatory attention, But this is not to say that there is no regulatory attention to DeFi now.”
In July, the total value locked by DeFi exceeded US$2 billion, and the market value exceeded US$7 billion. However, compared with the traditional market, this is still insignificant.
Pierce said the DeFi team and its supporters have not yet sought formal guidance from the agency. She has received more questions about the regulatory role of decentralized exchange platforms (DEX). Except for the types of lawyers who occasionally express interest in specific DeFi regulations on Twitter, not many insiders have come into contact with the SEC.
However, she believes that these dialogues with regulation will eventually take place, and she welcomes this process because DeFi may challenge the US perception of financial regulation.
Digital assets have brought unique challenges to regulators, while DeFi is another branch with its own nuances. This presents a unique challenge: who should be responsible? When the goal is to build networks that rely on smart contracts instead of people to manage them, this way, if something goes wrong, these networks can attribute the error to the contract instead of the manager.
“This will challenge our approach to regulation. This makes us question, what do we think is the role of regulators in DeFi?” Pierce said.
It is not clear whether the existing regulatory proposals can be resolved. For example, Peirce proposed a regulatory haven for token projects in February. The proposal is currently undergoing a public comment period. Although this policy will provide a certain amount of time for the blockchain network to make it truly decentralized, it is not clear whether this policy can be seamlessly applied to DeFi governance tokens.