During Tuesday’s Senate Banking Committee hearing, Senator Elizabeth Warren reportedly urged US Security Exchange Commission (SEC) Chairman Gary Gensler to regulate crypto.
Summary
Warren and Gensler and crypto regulation in the US
Warren reportedly intervened by describing practical examples of token investments, highlighting the high taxes of Decentralized Finance (DeFi).
Not only that, the examples also describe the dangers that small investors would face from exchanges, citing first Coinbase and then DEXs in general.
Specifically, Warren commented on the general scenario as follows:
“You know, there are a whole list of problems with crypto – unreliable tech, scams, devastating climate impact. But high, unpredictable fees can make crypto trading really dangerous for people who aren’t rich.
Regulators need to step up to address crypto’s regulatory gaps and ensure that we’re actually building the inclusive financial system that we need. And Chair Gensler, I expect you and the SEC to take a leading role in getting this done”.
Agreeing but not entirely, was the Chairman of the US SEC. Indeed, Gensler reportedly responded to Warren on the subject of DeFi and fees, as follows:
“I don’t know because it’d be all in the user agreement, and by the way, you put quotes around DeFi. I think that’s helpful because they really decentralized a name only. There’s a lot of user to user agreement. There’s something you’re doing with this platform. There’s a governance token. There’s usually some fees. But I don’t know what the particular fees would be”.
Moreover, Gensler continued on speaking by sharing his view that crypto is a highly speculative asset class and not the path to financial inclusion mentioned by Warren.
Senator Warren’s “volatile” approach to crypto
The US Senator has a somewhat “volatile” relationship with Bitcoin and crypto. Last July, Warren also reportedly said that cryptocurrencies could solve the problem of the unbanked.
Despite her very harsh view against Bitcoin, she would also be against the huge failure of traditional banks that are unable to serve millions of low-income Americans.
According to the FED, there are about 55 million unbanked in the US, equivalent to 22% of all US households. By unbanked is meant all those adult citizens without a bank account or any other financial institution, so as to be considered out of the mainstream.
In this case, Warren would be in favour of Central Bank Digital Currencies (CBDCs) precisely because, with their structure and low fees, they could be used without the need for intermediaries such as banks.
