The world of digital currencies has been assailed again. Now, the harsh objections come from the U.S. senators against stablecoins. The dollar-pegged assets are at the receiving end of the reprimand, which has led to a fresh summons for the clampdown.
Elizabeth Warren representing Massachusetts, led the affront against digital currencies. She strongly believes stablecoins threaten not only the U.S. economy but also consumers. She thinks that many goons are taking advantage of the space to exploit DeFi. The exploitation carried out by the giddy developers is at the detriment of consumers exposed to continuous risks within the unregulated industry.
Threat to the U.S. Economy
She had cast serious aspersions against the crypto ecosystem in the times past where she described it as “shady.” In July, the lawmaker had remarked that the crypto industry is “run by questionable developers.” She stated that leaving the industry unregulated is a “looming threat to the financial system of the United States.”
She had unleashed fierce criticism against the crypto space sitting with the Senate Committee. The gathering addressed issues affecting Banking, Housing, and Urban Affairs. At the hearing, she declared the crypto industry a risk harbinger to consumers. She also believes that crypto will affect the country’s economy in the long run if left unchecked and controlled.
Increasing Number Of Defi Projects Calls For Concern
She decried the rate digital assets pop up, saying that it is likely to see crypto-assets created by unscrupulous organizations without proper evaluation and control. She believes that cyber gangs are utilizing DeFi, which is not protected from scamming innocent consumers and users. In her opinion, it is high time regulators swoop into the crypto scene to bring sanity to the space before events take a wrong turn.
Other senators said stablecoins are a threat to fiat, which was precisely what they were designed for by the cryptocurrency ideology. The cryptocurrency idea of stablecoins conflicts with the fiscal policy of the Federal Reserve for the dollar. Senators believe Stablecoins caused the recent economic downturn resulting in hyperinflation. The conflict between digital and fiat currency led to “unprecedented money printing,” surpassing an inflation rate of more than 40 years.
Senator Brown described crypto as “magic money.”. In his opinion, he believes stablecoins are used as a safe threshold for a crypto ecosystem that he describes as “a fantasy economy.” He thinks that users are pulled in with the promise of stability offered by the stablecoins to trade a volatile market.
Last week, six CEOs of crypto startups paid a visit to Capitol Hill to discuss the long-term possibilities of the crypto industry with lawmakers and regulators. The comments of these executives are explicit and have not been fruitful, looking at the lingering perception of the lawmakers and regulators.
While senators remain confounded with stablecoins and their economic role, Tether remains embroiled with the government after a lawsuit. About six senators supported the crypto industry regardless of the calls for clamping down on the industry. These senators wrote a letter to Janet Yellen, the Treasury secretary, asking for specific regulations for the crypto industry.
The Senators demanded more clarification on “broker.” A word that was used repeatedly in the infrastructure bill. The new account is expected to have significant ramifications for crypto, where users and exchanges will pay tax for services and products.