U.S. Senator Elizabeth Warren, a longtime crypto critic, mentioned New York Times that of their opinion “crypto is the new shadow bank”.
Senator Elizabeth Warren
The New York Times article primarily centered on BlockFi, the crypto mortgage startup that has attracted the eye and controversy of many authorities regulators within the United States. Many folks worry that crypto will carry banks again to the “Stone Age.”
Warren’s remark – crypto is a shadow financial institution – refers to a non-bank monetary establishment that gives identical providers as a financial institution; however, banking laws will not regulate it.
“Crypto is the brand new shadow financial institution. However, it provides many similar providers without the buyer safety or stability that help the standard monetary system. It’s like turning a chariot into gold, “mentioned Senator Warren.
The congresswoman additionally got here up with the concept of banning US banks from holding fiat deposits as a backup for issuers’ stablecoins. If that occurs, it could be a giant blow to the crypto market, particularly stablecoins.
TNS Warren had many conversations with SEC Chairman Gary Gensler and Janet Yellen, the US Treasury Secretary, through a sequence of public letters.
In July, Warren wrote to Secretary of State Yellen calling for a coordinated and coherent regulatory technique to mitigate crypto’s rising threat to the monetary system.
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Qin Shi Huang
According to The Block