U.S. Senator Elizabeth Warren of Massachusetts, decentralized finance he has stepped up gears in his criticism and expressed concern about how stablecoins will affect the average investor. Warren, who recently discussed stablecoins with the Banking Committee, is Professor Hilary J. from the American University Washington College of Law. With Allen, he addressed the potential threats of stablecoins in the US financial system.
DeFi Comment from a US Senator
Hilary Allen said that the mass redemption of stablecoins from people who have given up token investment is unlikely to have systemic consequences for traditional markets at the moment, although he noted that the effects of the DeFi system will be more dramatic. Senator Warren believes that the value of stablecoins will decline at the moment when people most need stability, with its situation affecting traditional finance, as it provides the lifeblood of the DeFi ecosystem outside of regulated sundays.
Elizabeth Warren called DEFI the most dangerous part of the crypto world: “This is where the director is actually not. It’s not a surprise DeFi, where fraudsters and counterfeiters interfere with investors. DeFi is the source of danger.”
Professor Allen quoted that the potential threat posed by Warren could be in DeFi’s future without addressing her claim about illegal transactions: “I don’t think DeFi can grow without stablecoins. I think he’s going to struggle. I think that at the moment DEFI is too limited to affect financial stability. But if it grows, I think there will be a real threat there, especially when it is intertwined with our traditional financial system.”
However, the discussion topic “Stablecoins: How They Work, How They are Used and What are their Risks” follows committee chairman Sherrod Brown’s demand that crypto companies publish information about consumer and investor protection on fixed crypto coins.
Elizabeth Warren, on the other hand, has previously used controversy and public statements, claiming that cryptocurrencies are mainly connected with illegal activities. At a meeting in June discussing central bank digital currencies, the senator from Massachusetts said that the crypto world does not currently have consumer protection.