The US Senate discussed the risks cryptocurrencies pose to financial stability and called for tighter regulation of the crypto industry.
Massachusetts Senator Elizabeth Warren said at a meeting of the US Senate Banking Committee that the crypto industry needs stricter regulation, and Ohio Senator Sherrod Brown asking himself the question “Cryptocurrencies: What are they good for?” at the beginning of his speech came to the conclusion that for “nothing.”
According to Warren, decentralization, which bitcoin enthusiasts are so proud of, does not really exist, because there are participants in the bitcoin network, large miners and corporations, that have influence over the network.
“Instead of leaving our financial system at the whims of giant banks, crypto puts the system at the whims of some shadowy faceless group of super coders and miners, which doesn’t sound better to me,” Warren said.
According to Brown, cryptocurrency poses a threat to consumers and the financial stability of the United States.
“There’s nothing democratic or transparent about a shady diffuse network of online funny money,” Brown said. He called for “smart regulations” that protect consumers from crypto “extortionists” and their “phony populist marketing.”
Minnesota Senator Tina Smith said most Decentralized Finance (DeFi) derivatives violate US commodity laws. This view was supported by Dan Berkovitz, a spokesman for the Commodity Futures Trading Commission. Smith later mentioned the huge carbon footprint that bitcoin mining leaves behind.
In parallel with the committee meeting, digital money was also discussed in the US House of Representatives. The topic of discussion was the digital currencies of central banks (CBDC). The House of Representatives noted the growing influence of cryptocurrencies on monetary policy and the rise of cybercrime.