Senator Elizabeth Warren has expressed deep concern over the massive adoption and rapid growth of cryptocurrencies in the United States, calling for regulation before it is “too late.”
During his participation in the hearing “Cryptocurrencies: What are they good for?”, of the United States Senate Committee on Banking, Housing and Urban Affairs, Democratic Senator for the state of Massachusetts Elizabeth Warren warned of the potential dangers of cryptocurrencies, for the United States financial system.
Warren hinted that the crypto space holds many dangers for the country's financial stability, which is why she prefers to see the American financial system in the hands of big banks rather than the community of users that make up the cryptocurrency industry. According to her, the crypto space is only full of anonymous people who remain in the shadows, which lends itself to illicit activities.
“Instead of leaving our financial system at the whims of giant banks, cryptocurrencies put the system at the whims of a group of shadowy, faceless super-coders and miners, which doesn’t sound any better to me.”
The hearing was attended by 3 representatives of the crypto industry: Jerry Brito, DEO of Coin Center; Marta Belcher, President of the Filecoin Foundation and Angela Walch, a researcher at the Centre for Blockchain Technologies at University College London, who interacted with the senators to discuss the benefits and risks of cryptocurrencies.
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The United States urgently needs crypto regulation
In addition to the hearing, Warren sent a letter to U.S. Treasury Secretary Janet Yellen, urging the department to create a new comprehensive and coordinated regulatory framework to address the reality of cryptocurrencies in the country. For the senator, who has repeatedly expressed her opposition to cryptocurrencies as BitcoinThese digital assets threaten the security and stability of consumers and the American financial system.
Warren noted that the rapid growth of cryptocurrencies is taking over the United States, becoming more embedded in its financial system, consumers and environment, creating new threats, she said.
According to informs CNBC, Warren calls on Yellen to use her power on the Financial Stability Oversight Council to address the risks of cryptocurrencies and regulate the fast-growing market before it's too late.
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In her letter to Yellen, Warren cited five of the main risks that she believes cryptocurrencies pose. First, the senator said that the rise of the crypto space is encouraging the creation of hedge funds and investment vehicles that lack transparency and that put the security of investors and their funds at risk. Also, the senator said that the adoption of cryptocurrencies means great risks for banks, which may see their products and services affected by the rise of these assets.
On the other hand, the US senator revealed her concern about stablecoins, whose capitalization has grown to unimaginable levels in just a few months. Cyberattacks and ransomware are also on Warren's list of concerns, as more and more hacker groups are hiding in some cryptocurrencies to scam and extort their victims. Finally, the senator indicated that the rise of decentralized financial ecosystems, known as DeFi, threaten the country's financial stability.
Stricter regulations
Warren's request comes as U.S. financial regulators are debating the direction to take in the crypto industry. Earlier this week, Yellen convened the President's Financial Markets Task Force to discuss the future of cryptocurrencies. stablecoins, cryptocurrencies issued by companies whose value is linked to national currencies or other assets.
Also, the president of the United States Federal Reserve (FED) Jerome Powell, is considering the issuance of a digital currency CBDC, although Warren is in favor of issuing a digital dollar.
Cryptocurrency growth in the United States
The United States is one of the countries leading the interest and adoption of cryptocurrencies in the world. In the last year, the crypto market showed impressive exponential growth in the country. According to the latest report presented by the market analysis company Gallup, 13% of the US adult population holds investments in Bitcoin.
Likewise, the North American country is the best prepared in the world in terms of infrastructure. According to data from the data and analytics firm Crypto HeadThe United States has a total of 17.436 cryptocurrency ATMs installed in its territory; 91% more than Canada, which is the second country with the most cryptocurrency ATMs, with around 1.464 ATMs installed.
Pro-crypto politicians and rulers
Cryptocurrency innovation has also been attorney of several rulers in the country, who have given the green light to several proposals and projects to promote the development of cryptoassets.
For instance, Wyoming It is considered the crypto paradise and blockchain In the United States, with favorable regulations for companies in the industry, for the mineros of cryptocurrencies and for the legal constitution of decentralized organizations such as those DAO. Cynthia lummis, a senator from the state of Wyoming, invited displaced miners from China to settle on her territory.
The rulers of Texas y Colorado They are also opening the doors to technological and financial innovation of cryptocurrencies, as are the cities of Jackson (Tennessee), Miami (Florida) and Williston (North Dakota). In May, Michael Hsu, the current Comptroller of the Currency in the United States (OCC), said that US regulators are divided and have fragmented opinions about the risks and benefits of cryptocurrencies.
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