Hester Peirce encourages DeFi, calls for legal clarity, requires freedom to experiment
The decentralized finance (DeFi) have gained enormous popularity in recent months. Many major industry players have recognized the potential of space. It seems that the DeFi issue has now reached the SEC.
In a positive development for the ecosystem, the commissioner of the US Securities and Exchange Commission (SEC), Hester peirce, has asked for proper regulation from federal regulators surrounding the DeFi space.
During a speech at the George Washington University Law School Conference for the Regulation of the Digital Economy, Peirce said it is important to consider the potential advantages and disadvantages of space.
But most importantly, he continued to emphasize the need to offer legal clarity and the freedom to experiment to help DeFi compete with its centralized finance (CeFi) counterpart to provide financial services to investors.
It's no secret that DeFi apps are poised to challenge traditional financial players on several fronts. And regulators seem to have realized this.
The executive said DeFi is likely to provide "A very good test" for control bodies to regulate with a view to protecting the interests of investors and markets, not traditional operators. According to a published version of speech, Peirce said:
"The anti-Wall Street sentiments running through the market events of recent weeks and the growing understanding of the power that centralized public and private entities wield in our lives have inspired some to call for the elimination of the legacy financial system."
DeFi could finally be getting the recognition industry players are looking for. It is one of the spaces of massive growth in the field of cryptocurrencies with significant capital involved.
The latest comment from a esteemed executive like Peirce is crucial for decentralized industry, especially at a time when there has been an influx of institutional money.
Peirce's words in support of DeFi added legitimacy to a space that, most of the time, has been dismissed as a fad or a scam.
Building further hope in the burgeoning DeFi landscape, the Commissioner also noted:
"While it is a work in progress with all the growing pains and rough edges it entails, DeFi's promises of democratization, open access, transparency, predictability and systemic resilience are compelling."
Decentralized finance is evolving and with it the concept of financial systems. Many analysts had previously noted that space is likely not only to have a significant impact on how traditional financial establishments operate in the future, but could also cause a change in the structure of the entire financial system at the macroeconomic level.
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