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WASHINGTON, June 9 (Reuters) – US Senator Elizabeth Warren on Wednesday called on US policymakers to directly address issues posed by the growing use of cryptocurrency, while claiming that a digital currency backed by the Reserve federal government was very promising.
Democrat Warren, a leading Wall Street critic and consumer advocate, said cryptocurrency’s promise to boost everyday Americans has failed to materialize and the government needs to act instead to solve a host of problems. .
Cryptocurrency has created opportunities to scam 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 disappears. This will not be the case. It is time to face these problems 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 Sen. Pat Toomey, who instead called for continued growth in 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.
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. (Report by Pete Schroeder in Washington edited by Matthew Lewis)
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