Hester Peirce, one of five U.S. Securities and Exchange Commission (SEC) commissioners, has warned that the U.S. could fall behind the European Union and the U.K. in cryptocurrency regulation if it fails to enact clear rules.
According to Pierce, the regulatory framework currently being developed in Brussels and London could serve as a blueprint for lawmakers in Washington.
The U.S. has yet to establish a comprehensive cryptocurrency regulatory framework, opting instead for a wave of enforcement actions against illegal cryptocurrency activity, led by SEC Chairman Gary Gensler.
Peirce, who has often disagreed with Gensler on cryptocurrency regulation, suggested that the U.S. should create a regulatory framework that balances investor protection with innovation.
The lack of clear regulations in the U.S. has led to concerns that the cryptocurrency industry could move to friendlier overseas jurisdictions.
Peirce acknowledged this, noting that “we’re obsessed with this question of what happens if people take their business elsewhere”. However, she believes a sound regulatory framework will encourage innovation and investment in the United States.
Peirce’s comments come as cryptocurrencies are becoming an increasingly important part of the global financial system. Many experts believe that clear and consistent regulations are necessary for the cryptocurrency industry to continue to grow and mature.
U.S. states have taken steps to regulate cryptocurrencies in the absence of federal regulation. For example, the state of New York created the BitLicense, which sets out the requirements for companies wanting to operate in the state’s cryptocurrency market. However, some in the industry have criticized BitLicense for being too cumbersome and complicated.
Peirce’s call for a clear regulatory framework for cryptocurrencies in the U.S. was echoed by others in the industry.
Many believe the lack of clear rules has led to uncertainty and confusion, making it difficult for companies to do business in the U.S. market.