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US Senator Elizabeth Warren speaks at a Senate Finance Committee hearing on the IRS budget request on Capitol Hill in Washington, June 8, 2021. REUTERS / Evelyn Hockstein / Pool
US Senator Elizabeth Warren on Wednesday called on US policymakers to directly address issues posed by the growing use of cryptocurrency, while saying that a digital currency backed by the Federal Reserve was “very promising.”
Democrat Warren, a leading Wall Street critic and consumer advocate, said cryptocurrency’s promise to boost ordinary Americans has failed to materialize and the government needs to act instead to solve a host of problems.
“Cryptocurrency has created opportunities to defraud investors, help criminals and worsen the climate crisis,” she said during a congressional hearing. “The threats released by the crypto show that Congress and federal regulators cannot continue to hide, hoping that the crypto goes away. It doesn’t. It’s time to face these issues head-on.”
Warren supported the Federal Reserve’s review of a digital dollar, saying it could boost poorer Americans and streamline the payments system if designed properly.
However, Republicans took a much more cautious tone, wondering if such a Fed-backed product is even necessary and what that might mean for the traditional banking system.
“We don’t need a state-sponsored bank to interfere with this successful free enterprise system,” said Senator Pat Toomey, who instead called for continued growth of private digital currencies.
The Senate Banking Committee hearing marked one of the most focused debates to date in Congress on the implications of a Fed-backed digital currency. The central bank said it was exploring the issue, as its global counterparts, led by China, take steps to establish their own digital currencies. Read more
The debate in Washington is important because Fed Chairman Jerome Powell has said the central bank will not proceed with a digital currency without congressional support.
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