US Senator says Defi is the most dangerous part of crypto-the regulatory authorities call on to intervene before it is too late-regulation
US Senator says Defi is the most dangerous part of crypto-the regulatory authorities call on to intervene before it is too late-regulation
Senator Elizabeth Warren asked the supervisory authorities to act against decentralized finances (defi) and stable coins, "before it is too late". She said: "Defi is the most dangerous part of the crypto world ... Here the fraudsters, the fraudsters and the fraudsters mix among part-time investors and the first crypto dealers."
US senator calls on regulatory authorities to proceed in defi and stable coins
During a hearing from the Senate Committee for banks, housing and urban matters on Wednesday, the US Senator Elizabeth Warren (D-Mass.) Asked the supervisory authorities to "go back" for stablecoins and decentralized financial platforms (Defi), "before it is too late."
She brought stablecoins tether ( usdt ) and USD Coin (USDC). In response to Senator Warren, Alexis Goldstein, Director of Financial Policy at the Open Markets Institute, said that StableCoins "cannot always be secured one to one ... because the assets that support these tokens are often not real dollars".
Warren pointed out that according to Tether's own report, "only about 10 % of the assets that support his stable coin are real dollars on the bench. 90 % are something else - no real dollars." In addition, she emphasized that the report "is not actually checked by a comprehensive tested annual financial statements or by a state supervisory authority".
While he found that "StableCoins are not always stable", Warren described: "It is worse. In economically difficult times, people are most likely to stand out from risky financial products and switch to real dollars. Stable coins will take a break when people need the most stability, and this run-on-bank mentality could ultimately fall off our entire economy bring." The senator said:
Defi is the most dangerous part of the crypto world. The regulation is practically missing here and - no surprise - the fraudsters, fraudsters and fraudsters mix among the part -time investors and first -time crypto mandrators. Shoot, in Defi someone can't even say if they are dealing with a terrorist.
she continued: "Stable coins are the life elixir of the Defi-Ekosystem. In Defi, people need stable coins to act between different coins, to act, lend and lend derivatives-all outside the regulated banking system. Without stable coins, Defi comes to a standstill."
During the hearing, Hilary Allen, professor at the American University College of Law, answered whether stable coins are a risk of the US financial system. Warren asked the professor: "Defi endangers our financial stability? And can defi continue to grow without stable coins?"
everyone replied: "I don't think Defi can grow without stable coins. I think it would fight. At the moment, I think that Defi is so far that it does not impair the financial stability, but if it grows, I think there is a real threat. Especially if it is intertwined with our traditional financial system and that this integration is both in the traditional financial and also to follow the crypto side.
emphasize that "StableCoins do not have supervisory authorities, no independent examiners, no guarantees. And they support one of the most dodgy parts of the crypto world - the place where consumers are least protected from fraud," concluded Senator Warren:
This is a risk for dealers ... for our economy. It is time to act before everything explodes ... Our supervisory authorities must seriously take action against these risks before it is too late.
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