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Warren: U.S. government needs to confront crypto threats 'head on'

ForexJun 09, 2021 05:26PM ET
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© Reuters. FILE PHOTO: U.S. Senator Elizabeth Warren speaks during a Senate Finance Committee hearing on the IRS budget request on Capitol Hill in Washington U.S., June 8, 2021. REUTERS/Evelyn Hockstein/Pool

By Pete Schroeder

WASHINGTON (Reuters) - U.S. Senator Elizabeth Warren on Wednesday called on U.S. policymakers to directly tackle issues presented by the growing use of cryptocurrency, while saying a Federal Reserve-backed digital currency shows "great promise."

Democrat Warren, a prominent Wall Street critic and consumer advocate, said cryptocurrency's promise of boosting everyday Americans has failed to materialize, and instead the government must act to address a host of problems.

"Cryptocurrency has created opportunities to scam investors, assist criminals, and worsen the climate crisis," she said at a congressional hearing. "The threats posted by crypto show that Congress and federal regulators can't continue to hide out, hoping that crypto will go away. It won't. It's time to confront these issues head-on."  

Warren threw support behind the Federal Reserve's consideration of a digital dollar, saying it could boost poorer Americans and streamline the payments system if properly designed.

However, Republicans struck a much warier tone, questioning whether such a Fed-backed product is even necessary and what it might mean for the traditional banking system.

"We don’t need a state-sponsored bank interfering with this successful free-enterprise system," said Senator Pat Toomey, who instead urged continued growth of private digital currencies.

The hearing held by the Senate Banking Committee marked one of the most focused debates yet in Congress on the implications of a Fed-backed digital currency. The central bank has said it is exploring the issue, as global counterparts, led by China, take steps to establish their own digital currencies.

The debate in Washington is significant because Fed Chair Jerome Powell has said the central bank will not proceed with a digital currency without support from Congress.

Warren: U.S. government needs to confront crypto threats 'head on'
 

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Comments (4)
mohamed alhajri
mohamed alhajri Jun 10, 2021 12:42PM ET
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Crypto created and keeps creating new wealth to otherwise poor people who would've been stuck in their financial status till they perish and pass it down to their children.So once again the great senator is wrong worldwide it created new wealth. Finally the poor man around the globe can afford to invest in something and the senator wants to take that away.
Connecticut Yankee
A_Jaundiced_Eye Jun 09, 2021 6:56PM ET
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The article contains several typos; I have corrected them: "Democrat Warren, ...said...the government...has created opportunities to scam investors, assist criminals, and worsen the climate crisis...The threats...show that Congress and federal regulators can't continue to hide out...It's time...[for some] head..." "
Andrew Allen
Andrew Allen Jun 09, 2021 5:53PM ET
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isn't the dollar already digital? I use my credit card to buy most things already. I suppose this is a just a ploy to remove all untraceable currency i.e. cash?
Sarah Setser
Sarah Setser Jun 09, 2021 5:31PM ET
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I wouldn't waste my time investing in a Federal backed crypto. You guys can't even use money responsibly.
mohamed alhajri
mohamed alhajri Jun 09, 2021 5:31PM ET
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They do but to enrich themselves and their sponsors and that why it ends up "irresponsibly"
 
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