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Senator Elizabeth Warren Describes Cryptocurrency As The New "Shadow Bank"
Summary: U.S. Senator Elizabeth Warren (D-MA), a longtime crypto critic, told the New York Times that, in her view, cryptocurrency is the "new shadow bank." She said: "Crypto is the new shadow bank. It provides many of the same services, but without the consumer protections or financial stability that back up the traditional system...It’s like spinning ...
U.S. Senator Elizabeth Warren (D-MA), a longtime crypto critic, told the New York Times that, in her view, cryptocurrency is the "new shadow bank."
She said: "Crypto is the new shadow bank. It provides many of the same services, but without the consumer protections or financial stability that back up the traditional system...It’s like spinning straw into gold."
Shadow bank refers to some non-bank intermediaries that are outside the banking supervision system and provide financial services similar to traditional commercial banks. Generally speaking, the businesses of investment banks and commercial banks are subject to the supervision of central banks and other institutions. However, if they operate some businesses in the form of shadow banking and make them off-balance-sheet businesses, which can escape supervision, causing problems such as systemic risks and regulatory arbitrage.
Warren also proposed the idea of prohibiting U.S. banks from holding cash deposits that support stablecoins, and believes that this will effectively end the soaring crypto market.
Warren wrote to Treasury Secretary Yellen in July, calling for a coordinated regulatory strategy to mitigate the growing risks that cryptocurrencies pose to the financial system.
By Mary Liu
Tags: Cryptocurrency,Elizabeth Warren,Regulation
Link: Senator Elizabeth Warren Describes Cryptocurrency As The New "Shadow Bank" [Copy]