US Senator Elizabeth Warren (D-MA) says that the bigger the crypto sector gets, the bigger the risk it poses to the financial system at large.
In a new interview with Bloomberg, Warren draws parallels between the growing crypto industry and the 2008 financial crisis.
“So do you remember money markets back in 2006, 2007, 2008, and how much money flooded into money markets because the banks were paying like nothing in interest on money and savings accounts? And the money markets were saying, ‘Hey, put your money over here, we will pay a little more and give you all the benefits of a checking account.’ And then the crash came…
We’re in the same kind of risk right now with crypto. The bigger it gets, and the more it stays outside the financial system, something goes wrong – there’s run on crypto, there’s a problem elsewhere in the economy – I don’t want the US taxpayer to be the one who gets called on to back up the financial system again.”
Warren says that the crypto markets need a “cop on the beat” to protect investors.
“If people are going to be out there trading in it, there needs to be a cop on the beat. Because when there’s not a cop on the beat in any market, then it’s the small traders who get cheated. And that’s what always worries me…
This is about putting some basic rules in place so that anyone can trade with just some basic confidence that the biggest kinds of scams will have a cop on the beat to blow the whistle and put a stop to it.”
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