“An unregulated cryptocurrency market, poses a substantial risk to hedge funds and banks,” said Elizabeth Warren.
Senator Elizabeth Warren of Massachusetts, a Democrat, has called on US Treasury Secretary Janet Yellen and other regulators to build a “comprehensive and coordinated” framework for dealing with vulnerabilities in the cryptocurrency market.
The Financial Stability Oversight Council, or FSOC, “must act immediately to employ its legislative authority to address cryptocurrencies’ vulnerabilities and regulate the market to guarantee the safety and stability of consumers and our financial system,” according to a letter addressed to Yellen. She went on to say:
“As the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, consumers, the environment, and our financial system are under growing threats.”
An unregulated cryptocurrency market, in Warren’s opinion, poses a substantial risk to hedge funds and banks. She also expressed concern about the use of bitcoin in cyberattacks and the dangers that stablecoins bring.
Warren has emerged as one of crypto’s most vocal opponents in the United States Senate. She called digital assets like Dogecoin (DOGE) a “fourth-rate replacement to real currency” in June and encouraged the Senate Banking Committee to consider enacting stricter rules.
Due to an apparent increase in crypto-ransomware assaults and the purported environmental impact of Bitcoin (BTC) mining, calls to regulate cryptocurrencies have become stronger in recent months.
The Securities and Exchange Commission has recommended working with Congress to introduce more comprehensive cryptocurrency legislation, according to Cointelegraph.
In March, Gary Gensler, the recently appointed head of the Securities and Exchange Commission, told a congressional subcommittee that his agency only spends $325 million per year on blockchain research.
Warren appears to be considerably more amenable to the idea of a central bank digital currency, or CBDC, despite her general scepticism of crypto assets.
The Federal Reserve is doing study into CBDC development but has not made any firm plans to proceed. When it comes to CBDCs, the Fed is considered to be significantly behind the curve among major central banks.