US Senator Elizabeth Warren, a longtime critic of cryptocurrencies, shared her view with the New York Times that cryptocurrencies are the “new shadow bank.”
The Times story focuses mainly on BlockFi, a venture capital fund-backed crypto lending startup, which has caught the focus of quite a few regulators in the U.S. as a move to enter a bigger enjoying discipline to catch up. the delay with the advancement of crypto startups in the banking and providers sector.
Warren’s remarks – a “shadow bank” referring to a non-financial institution fiscal institution that presents related providers past standard banking regulation – is a signal that the Massachusetts senator stays a robust critic of cryptocurrencies and the marketplace constructed all over. to their applications. Ms. Warren informed the Times
“Cryptocurrency is a shadow bank. It offers many of the same services as a bank, but without the consumer protections or financial stability that support the traditional system ”.
According to the report, Ms Warren also raised the notion of banning banking institutions in the United States from holding fiat deposits as backups for stablecoins, which could correctly finish a industry that is displaying indicators of a robust rally.
Through a series of public letters, Warren started a dialogue with the head of the Securities and Exchange Commission, Gary Gensler, and with Janet Yellen, Secretary of the Treasury to President Joe Biden.
In July, Warren wrote to Yellen and termed “a coordinated and cohesive regulatory strategy to mitigate the growing risk that cryptocurrencies pose to the financial system. “
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