Hester Peirce, a member of the US Securities and Exchange Commission (SEC) and known as the “Crypto Mother”, made statements about the DeFi industry.

In a speech at the George Washington University Law School event on digital economy, Peirce said that given the increased anti-Wall Street sentiment surrounding the brief squeezing of GameStop stocks, DeFi could be the financial system it has been looking for. Peirce said the technology could provide a “very good test” for the regulator in protecting investors and markets.

“Anti-Wall Street rhetoric has an impact on the market and has shown how many central institutions affect our lives. They’re putting DeFi in its place. The DeFi market is growing rapidly and, unlike central finance, it operates with smart contracts. DeFi enables cryptocurrency transactions. While there is a challenge in the DeFi area, the democracy, open access, transparency, predictability and durability in the system are impressive. ”

“While it is a work in progress with all the growing pain and the jagged edges it implies, DeFi’s promises of democratization, open access, transparency, predictability, and systemic flexibility are attractive,” Peirce said.

“As supervisors, we know the advantages and disadvantages, we must allow both legal clearance and experimental freedom. So DeFi can compete with CeFi. ”

Starting with the 2008 financial crisis, Peirce added, given the disappointment from the recent GameStop trades, the SEC must look for ways to ensure the markets are inclusive. He said the commission should be “more proactive in embracing technology” for the economy to have more people and improvement.

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“The digital economy poses some new regulatory challenges, but it also provides us with new tools to tackle these challenges. We must use the tools we have carefully. We need to understand the potential of new technology and how it will work for people. ”

Peirce had previously said that DeFi poses new challenges for the SEC due to a number of unsolved legal issues. While some projects in the field are likely to fall under securities laws, there are many DeFi offers (offerings) consisting of tokens that lack liquidity and are used to fund blockchain projects. Its developers cautioned that if the project “looks like traditional securities” they speak to the SEC.

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