US Senator Elizabeth Warren (D-MA) says that decentralized cryptocurrencies are not “better” than the traditional financial system already in place.
Speaking at a hearing entitled “Cryptocurrencies: What are they good for?” held by the Senate Committee on Banking, Housing, and Urban Affairs, Senator Warren says that decentralized cryptocurrencies are essentially transferring power from giant banks to a “shadowy faceless group of super coders and miners.”
“So they [cryptocurrency miners and developers] have the capacity here to manipulate the system. It sounds to me like a lousy tradeoff. 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.”
The Massachusetts senator also says that despite the shortcomings of the traditional financial system, cryptocurrencies could present even bigger risks.
“There’s no doubt that we need a stronger, safer, and more inclusive financial system. The biggest banks have too much power, represent too many risks to financial stability and have failed to serve Americans’ needs. The giant banks have created huge problems, but I’m not convinced that crypto is the solution. In fact, crypto could be even more dangerous for consumers, more dangerous for the environment and more dangerous for the stability of our financial system.”
Warren adds that regulations for the crypto sector are needed.
“All the warning signs are flashing. The hype, the volatility, the wild claims that turn out to be false. As the crypto markets grow, so do the risks to our financial stability and our economy. Regulators need to do their job and step in before it’s too late.”
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