Senator Elizabeth Warren Challenges Administrations Posture on Digital Assets: They Threaten Overall Economic Stability

The crypto ecosystem has the capacity to undermine our national security, worsen the climate crisis, harm consumers and retail investors, and threaten overall economic stability - Sen. Elizabeth Warren Click to Tweet

Senator Elizabeth Warren, a Democrat that sits on the Senate Banking Committee, is not convinced about the Biden Administration’s approach to digital assets. In a letter addressed to Janet Yellen, the Secretary of the US Department of Treasury, Senator Warren claims “cryptocurrency poses grave risks to investors and to the economy as a whole.”

A long-time critic of digital assets, and Fintech innovation in general, Senator Warren has put herself at odds with the White House following the release of the Framework for the Development of Digital Assets, a policy measure that aims to balance protection aspects with responsible innovation.

The Senator states she has been “ringing the alarm” on the many risks created by crypto.

“I am deeply concerned by the volatility of the cryptocurrency market and the inadequate regulatory environment in which crypto scams, fraud, theft, and evasion continue to run rampant and mom-and-pop investors’ savings have evaporated. Cryptocurrency threatens our climate, our economy, and consumers while damaging national security by undermining sanctions regimes against foreign enemies.”

Senator Warren bullets out her concerns and grievances, including:

  • Crypto poses national security risks
  • Cryptomining exacerbates environment risks
  • Crypto poses potential threats to financial stability
  • Crypto market fundamentally lacks protections for consumers and investors

There is little or no recognition of the intrinsic benefits of distributed ledger technology, the potential for cost reductions, greater financial inclusivity as well as the fact that securities will all be digital at some point in the not-so-distant future. These digital securities may also possess additional traits that go beyond their current analog iterations.

Senator Warren closes the letter including a series of previous missives pertaining to crypto, demanding Secretary Yellen to “utilize every tool at your
disposal, including FSOC’s statutory authorities, to protect consumers and investors, our economic and national security, and our environment.”

You may read the letter here.

 

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