After the recent downfall of financial institutions in the United States, lawmakers have raised concerns regarding cryptocurrencies. A group of senators recently held a discussion to share their opinions on the matter.
During Thursday’s Senate Finance Committee hearing, Senator Michael Bennet expressed his displeasure towards banks that partner with cryptocurrencies. At the same time, the marijuana industry continues to face significant obstacles in accessing the financial system.
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During a Senate Finance Committee hearing, Senator Michael Bennet from Colorado voiced his concerns to Treasury Secretary Janet Yellen regarding banks’ growing involvement in the crypto industry. Yellen was in attendance to address inquiries from lawmakers on a range of topics, such as taxes, interest rates, and bank failures.
Bennet drew attention to the fact that banks increasingly partner with crypto companies. At the same time, the marijuana industry, which has been legalized in several states, continues to face significant challenges in accessing the financial system.
The Senator questioned whether investing in crypto was a responsible decision for banks and expressed his skepticism about the industry’s stability compared to marijuana. As reported by Barron, Signature Bank, Silicon Valley Bank, and Silvergate Bank have all experienced significant declines in the past week.
Barron’s, a weekly publication by Dow Jones & Company and a sister publication of The Wall Street Journal, covers important financial news, market trends, and relevant statistics in the US. Furthermore, crypto firms accounted for approximately 20% of deposits at Signature Bank.
During the session, Bennet made remarks on the situation and drew a comparison with the state of the marijuana industry in the country. The Senator was vocal in criticizing cryptocurrencies and argued that marijuana is comparatively more stable.
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Over the weekend, Signature Bank collapsed, with nearly 20% of its deposits originating from the crypto industry – an area where financial institutions are allowed to operate, unlike marijuana.
The Senator expressed dissatisfaction with this situation, stating that crypto is notoriously unstable and incomprehensible to most people. According to sources, marijuana has been legalized in thirty-seven states of the US, although it remains illegal at the federal level for possession, distribution, or sale.
Finally, Bennet inquired about Yellen’s opinion on whether Signature Bank acted responsibly towards its depositors by investing in crypto, which he argued was less stable than the marijuana industry.
US banks’ involvement in the crypto industry has been a topic of discussion among lawmakers and regulators for some time. The Federal Deposit Insurance Corporation has reported that many banks in the US are exploring the crypto sector and plan to offer various services in response to increasing consumer demand.
As of January 2023, data indicates that approximately one hundred and thirty-six banks have already become involved in or are planning to engage in various crypto-related initiatives. Despite this, the regulator has expressed skepticism regarding the potential risks the industry may pose to the traditional financial system.
The involvement of US banks in the crypto industry has become a topic of concern for lawmakers and regulators alike. Despite marijuana being legalized in over thirty states, the industry still faces significant barriers in accessing the financial system, while banks are increasingly exploring opportunities in the crypto sector.
According to the Federal Deposit Insurance Corporation, numerous banks under its purview in the US have already started or are planning to engage in various crypto-related initiatives to cater to increasing consumer demand. However, the regulator still needs to be convinced of the potential risks that the industry may pose to the traditional financial system, despite the growing interest in the sector.