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- Senator Warren asks for synchronized and deeply researched response to tackle the threats
- Cryptocurrencies are undermining the well established and regulated financial systems working globally
- Asks government to formulate a regulatory strategy to reduce the surging risks that cryptocurrency trade is posing
As the popularity of cryptocurrency and stablecoins surges call for it to be brought under some regulation is growing. The latest in this is longtime crypto sceptic Sen. Elizabeth Warren (D-Mass.), urging for a Coordinated and Holistic’ Response to ‘Dangers’ of Crypto.
In a letter to Treasury Secretary Janet Yellen, crypto sceptic Sen. Elizabeth Warren has highlighted crypto-enabled cyber attacks and unique threats posed by stablecoins as risks to the financial system. Senator Warren has asked for a ‘synchronized and deeply researched response to tackle the threats posed to the present economic regime.
Sen. Elizabeth Warren urges the government to formulate a regulatory strategy to reduce the surging risks that cryptocurrency trade is posing to the traditional financial regime. `
Synchronized and exhaustive research is needed
Sen Warren, in an open letter to the U.S. Treasury Secretary Janet Yellen on July 26, urged the Financial Stability Oversight Council (FSOC) headed by Janet Yellen to initiate a synchronized and exhaustive research to understand the different ways in which cryptocurrencies are undermining the well established and regulated financial systems working globally.
Warren was unrelenting in her attacks against the cryptocurrency sector and called it a grave threat to the investors, consumers and the environment. The leading cause Warren pointed out was the lack of regulation. However, Warren also warned that the increasing demand for cryptocurrency and the $2 trillion market cap could also pose systemic risks to the U.S. financial system.
Sen. Elizabeth Warren is a longtime critic of cryptocurrency and has in the past also sent letters to prominent officials in the Biden Administration warning about the disruptive potential of cryptocurrencies on U.S. and global financial regimens.
Earlier this month, Sen. Elizabeth Warren sent a letter to the Securities and Exchange Commission (SEC) chairman, Gary Gensler, asking for a clear cut policy on cryptocurrency and regulation by July 28. In interviews, Warren also criticized the speculative nature of digital assets. She is also pushing for regulation in her role as chair of the Senate’s Subcommittee on Economic Policy.
Warren, in her letter Yellen also talked about the increased threat to the established financial system’s increasing exposure to crypto-assets and the material distress spreading across the cryptocurrency ecosystem will also have a disruptive effect on the financial sector.
Slipshod regulatory efforts by the government insufficient
Among the risks faced by Banks Warren said was volatile crypto prices, the “unique threats” posed by stablecoins, the emergence of decentralized finance (DeFi) and the anonymity associated with it. Warren also criticized the slipshod regulatory efforts by the government and called it a short and knee jerk response.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
