US Senator Claims that Stablecoins can Threaten Traditional Financial Systems

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Senator Elizabeth Warren was recently speaking at the Senate Banking Committee on the matter of stablecoins. The Senator representing the state of Massachusetts recently issued some fairly abrasive remarks about the stablecoins. Warren has been known for her critical opinions about the DeFi markets. She has been vocal about how the stablecoin run can hurt the common investor.

The Senate hearing was held recently, and Warren had a discussion with Professor Hilary Allen from the Washington Law College and University. Warren asked Allen if stablecoins could hurt the traditional financial system of the country. Allen responded by claiming that it is possible that if a good number of people started to lose their faith in cryptocurrencies, it could have a devastating impact on the economy.

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According to Senator Warren, the biggest threat to the people of the United States is stablecoin because it is the main product of the DeFi markets. Warren further added that most stablecoins operate outside the regulated cryptocurrency market that giving them room to roam around without any accountability.

She also claimed that stablecoins are the most dangerous products coming out of the DeFi markets. Warren further added that according to the statistics, the scammers and the criminals prefer to use stablecoin and DeFi coin projects to opt for the decentralized markets to ensure that they can conduct transactions without any trace. She also claimed that stablecoins are very likely to be under the use of threat actors like terrorists.

Senator Warren was accompanied by some of the biggest names in the traditional financial markets. There was recently a discussion on the topic organized by the legislators in the United States. During the meeting, Warren acted as a witness; meanwhile, Open Markets director Alexis Goldstein, Davis Polk and Wardwell partner Jai Massari, and Head and CSO of Circle Dante Disparte also attended the meeting and testified alongside Warren.

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During the past few weeks, Warren has been attending public meetings and government hearings to advocate that cryptocurrencies are a tool for illegal businesses and threat actors. She also criticized the issue of the increasing Ethereum fee inflation recently. At one point, Warren called the cryptocurrencies bogus and useless asset classes.

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