by Emma Newbery | Updated July 29, 2021 - First published on July 28, 2021
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Senator Warren highlights what she sees as the wide-reaching dangers of cryptocurrencies.
Senator Elizabeth Warren is determined to keep stricter cryptocurrency controls on the political agenda. This week she wrote to Treasury Secretary Janet Yellen to urge immediate action.
The letter comes just weeks after the senator asked Securities and Exchange Commission (SEC) chairman Gary Gensler if the SEC had enough authority to regulate cryptocurrency exchanges.
The senator says she's become "increasingly concerned about the dangers cryptocurrencies pose to investors, consumers, and the environment in the absence of sufficient regulation in the United States."
Moreover, she believes that any delay in tackling these dangers could exacerbate the problem. "The longer that the United States waits to adapt the proper regulatory regime for these assets, the more likely they will become so intertwined in our financial system that there could be potentially serious consequences if this market comes under stress," the letter said.
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Warren thinks cryptocurrencies' impact could "ripple through nearly every corner of the financial system." Here are some of her specific areas of concern:
The senator thinks significant problems could fall through the cracks, because there's no single body responsible for controlling crypto services. She suggests that Yellen, who is Chair of the Financial Stability Oversight Council (FSOC), might take a leading role in developing a "comprehensive regulatory regime."
Increased crypto regulation in the U.S. is almost unavoidable. Elizabeth Warren is just one of many senior figures to highlight the risks presented by the sprawling cryptocurrency industry.
There's a good chance that Congress will create some kind of overarching regulatory cryptocurrency body, and that we'll see more regulation for cryptocurrency exchanges in the near future. We can also expect authorities to crack down on stablecoins and, at least, demand that each stablecoin is sufficiently backed by traditional money. It remains to be seen how much farther U.S. regulation will go.
Yesterday, in a Senate hearing entitled "Cryptocurrencies: What are they good for?" Senator Sherrod Brown spoke out against what he labeled "shady start-ups" in the crypto industry. He said, "After a decade of experience with these technologies, it seems safe to say that the vast majority haven’t been good for anyone but their creators."
In contrast, Senator Pat Toomey argued that "we shouldn’t lose sight of the tremendous potential benefits that distributed ledger technology offers." Several other witnesses spoke of the potential innovation and real-world uses of blockchain technology.
The hearing highlights the regulatory challenge that every country faces: What's the best way to protect consumers and the economy while also fostering an environment that unlocks the potential benefits of blockchain technology?
Cryptocurrency investors need to pay attention to how new regulations unfold. While regulation might actually increase consumer confidence and prove beneficial to crypto in the long run, it could also push crypto prices down in the near term.
If you currently use services that exist in a legal gray area, it might make sense to plan an exit strategy. For example:
There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. And to find the one that's right for you, you'll need to decide what features that matter most to you.
To help you get started, our independent experts have sifted through the options to bring you some of our best cryptocurrency exchanges for 2021. Check out the list here and get started on your crypto journey, today.
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