Senator Elizabeth Warren urges Janet Yellen to regulate crypto and develop a policy to address the risks of digital assets.
Warren said the growth of cryptocurrencies is a threat to the financial institutions and calls regulators to take action right away before bad outcomes.
US Senator Elizabeth Warren (New York State) raised concerns about the cryptocurrency market and called on Treasury Secretary Janet Yellen to identify and address the risks associated with the new asset class.
The Senator asked the Treasury Department to write “comprehensive and coordinated” guidance to help federal agencies regulate digital assets.
Warren has long been skeptical of the new asset class and urged Yellen to use his power over financial stability oversight to make the cryptocurrency industry safer.
Senators believe cryptocurrencies may increase the threat to traditional financial systems as digital assets become more prevalent.
Warren added that there are five main risks as the industry is weakly regulated.
She named the opaque risks of hedge funds and investment products, banking risks, cyberattacks and threats to DeFi and stablecoins as the biggest risks.
Warren said the excitement and volatility in the cryptocurrency market are signs.
she added that as the digital asset market grows, the risks to US financial and economic stability increase and regulators must act before its too late.
Senator Sherrod Brown said the technology behind digital assets, blockchain, could be useful for non-financial purposes.
He added that cryptocurrencies had yet to reach the stage of systematic impact , citing earlier comments from lawmakers who said digital assets were not considered a systematic issue. .. Brito calls cryptocurrency a product that hedge funds and other large corporations also invest in.
