Posted 10 months ago | by Catoshi Nakamoto
Senator Elizabeth Warren, or as this author will now refer to her as Queen FUD, went onto CNBC to discuss cryptocurrency regulation, one day after calling the industry a bunch of “shadowy super coders” and two days after writing a letter to Treasury Secretary Janet Yellen calling for oversight of the industry.
Warren argued that “we have a lot of problems in our financial system right now,” one of them being large banks controlling and putting a large part of the economy at risk.
“The question we have to ask is look at the design of crypto to see where it may be better but also to see where it may inject its own risks into the system,” she said. “Crypto’s overall interaction with the financial system needs to be taken into consideration.”
Warren stated that she doesn’t want to see the “big guys” residing in the shadows doing pump-and-dumps and defrauding the little guy.
“The question is how it’s aimed. Who takes advantage of there being no rules? It’s the big guys. Who wins when there’s no cop on the beat? It’s the big guys,” Warren said, adding that she wants regulations put in place before “a lot of people have been wiped out.” She added, that “rules of the road” give people confidence.
Warren also said that “digital currency” is “very interesting,” expressing there is “an enormous failure by the big banks to reach consumers all across the country,” referencing the unbanked and underbanked.
"One of the things I think is very interesting is digital currency," says @ewarren. "There has been an enormous failure by the big banks to reach consumers all across the country…digital currency and central bank digital currency may be an answer there." pic.twitter.com/sCVum1GGe2
— Squawk Box (@SquawkCNBC) July 28, 2021
According to Warren, there “maybe be an answer there” when it comes to “digital currency” and central bank digital currency (CBDC.) She reasoned utilizing CBDCs due to the fact that the costs are “extraordinarily low” for transactions. She failed to mention that the central banks would now have a permanent too big to fail card or the possible surveillance that a CBDC would bring as opposed to a decentralized cryptocurrency issued on a distributed public ledger.
As for taxes, Warren further expressed that “whatever assets one has whether it’s real estate, stocks or crypto, they should be taxed annually,” she noted this would be for those who have more than USD 50 million in assets, not normal people.
"I want to see us tax wealth, however your wealth is tied up it shouldn't make a difference," says @SenWarren on a wealth tax for #crypto. "Whatever form you have your assets … I think there ought to be a tax on that annually." pic.twitter.com/jXUBFCf13O
— Squawk Box (@SquawkCNBC) July 28, 2021
Warren sent a letter to Treasury Secretary Janet Yellen calling for tougher regulation of the crypto sector.
One of the points that Queen FUD argued in the letter was that DEFI developers were mostly anonymous and this could present “severe” risks to the country’s financial stability.
“Given that participants and project developers may remain anonymous, DeFi could present particularly severe financial stability risks. According to a 2019 Financial Stability Board report, decentralized financial technologies may raise new forms of concentration risks, unclear allocation of liability, and recovery and resolution challenges.”
What Warren fails to realize is the uncertainty around crypto, and the lack of any oversight or comments about what token is and isn’t a security breed this dangerous landscape for investors.
In the letter, Warren further urged Yellen who also serves as the Chair of the Financial Stability Oversight Council (FSOC) to “act with urgency” and adopt an appropriate policy to address the risks posed by cryptocurrencies. “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 senator from Massachusetts added:
“I have become increasingly concerned about the dangers cryptocurrencies pose to investors, consumers, and the environment in the absence of sufficient regulation in the United States.”
Galaxy Digital’s Mike Novogratz criticized her stance on cryptocurrencies, taunting her on Twitter saying “you really don’t seem so progressive to me.”
Banks charged 12 bn in overdraft fees, a fortune in atm fees, a fortune in checking account fees. But you keep going after crypto where saving and money transfer is a fraction of banks. Good job @SenWarren You really don’t seem so progressive to me.
— Mike Novogratz (@novogratz) July 28, 2021
Novogratz argued that Warren “keeps going after crypto where saving and money transfer is a fraction of banks,” while “banks charged USD 12bn in overdraft fees, a fortune in [ATM] fees, a fortune in checking account fees.”
He added: “If banks had the transparency of DeFi protocols, we would not have had the mortgage crisis. DeFi will win because it’s better. [Automatic] settlement. Bearer assets. Composability. Transparency. “We just need to solve for KYC [know-your-customer protections] which is coming. We need to educate our politicians.”
Bitcoin is currently trading at [FIAT: $39,912.54] UP +1.3% in the last 24 hours according to Coingecko at the time of this report.