More Traded, Senator Warren Again Warns Cryptocurrencies Protection Risks

Elizabeth Warren is known as a senator who often denounces bitcoin and other cryptocurrencies. (photo: instagram @elizabettwarren)

JAKARTA - Senator Elizabeth Warren, the Democratic Party representative from Massachusetts, has asked United States Treasury Secretary Janet Yellen and other regulators to develop a "comprehensive and coordinated" framework to address risks in cryptocurrency markets.

In a letter addressed to Yellen, the Democratic senator said the Financial Stability Oversight Board, also known as the FSOC, “should act quickly to use its legal authority to address cryptocurrency risks and regulate markets to ensure the safety and stability of our consumers and financial systems.”

“As demand for cryptocurrencies continues to grow and these assets become more embedded in our financial systems, our consumers, environment and financial systems are under growing threat,” Warren said in his letter.

In Warren's view, the unregulated cryptocurrency market poses a significant risk to hedge funds and banks. He also cited concerns about the use of cryptocurrencies in cyberattacks and the threat posed by stablecoins.

Within the United States Senate, Warren has emerged as one of the biggest detractors of crypto. In June, he described digital assets such as Dogecoin (DOGE) as a “fourth tier alternative to real currencies” and urged the Senate Banking Committee to consider drafting stricter regulations.

Calls for regulating cryptocurrencies have grown louder in recent months due to increased crypto ransomware attacks and the alleged environmental impact of Bitcoin (BTC) mining. As Cointelegraph reports, the Securities and Exchange Commission has proposed working with Congress to draft more comprehensive cryptocurrency regulations.

Gary Gensler, the newly appointed chairman of the securities regulator, told a congressional subcommittee in March that his agency only spends $325 million a year researching blockchain technology.

Despite his criticism of crypto assets in general, Warren seems much more open to the idea of a central bank digital currency, or CBDC. The Federal Reserve is in the process of researching the development of a CBDC, but has not yet made definite plans for moving forward. As far as major central banks go, the Fed is considered far behind the adoption curve with respect to CBDCs.