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“The threats posed by crypto show that congress and federal regulators can’t continue to hide out, hoping crypto will go away,” the Massachusetts senator stated.
Democratic Senator Elizabeth Warren was blunt in her criticism of cryptocurrency, but she appeared to see a federally-backed digital currency as a feasible answer to the country’s financial inclusion concerns.
At a Wednesday session of the Senate Banking Committee discussing a U.S. government-backed central bank digital currency, or CBDC, Warren said the recent explosion in cryptocurrencies had helped many people understand the foundational technology on which digital currencies were based. However, she called crypto a “fourth rate alternative to real currency.”
“Digital currency from central banks has great promise,” said Warren. “Legitimate digital public money could help drive out bogus digital private money.”
When discussing what she called “bogus” money, Warren referenced Dogecoin (DOGE) as an example of how the volatility of various cryptocurrencies makes them unfit as a means of exchange in her perspective. She denounced pump and dump operations as well as other apparent attempts to control the pricing of particular tokens.
“Crypto is a lousy investment,” said the senator. “Unlike, say, the stock market, the crypto world currently has no consumer protection. As a result, honest investors and people trying to put aside some savings are at the mercy of fraudsters.”
The Massachusetts senator also expressed her concerns about crypto being linked to a variety of unlawful acts, all of which are “made easier with crypto,” as well as environmental worries about crypto mining. She mentioned the recent ransom demand by hackers who hacked the Colonial Pipeline, causing fuel shortages for many Americans, and stated that some mining operations were “spreading filth in exchange for a chance to harvest a few crypto coins.”
“Cryptocurrency has created opportunities to scam investors, assist criminals, and worsen the climate crisis. The threats posed by crypto show that congress and federal regulators can’t continue to hide out, hoping crypto will go away. It won’t. It’s time to confront these issues head on.”