Senator Elizabeth Warren said cryptocurrencies posses many dangers to the environment.
The senator referred to the volatile nature of crypto, among other factors, and said it is not a good investment.
US Senator Elizabeth Warren discussed the risks associated with Bitcoin and other cryptocurrencies during a recent Senate hearing. Warren spoke about the dangers crypto pose to the environment during the hearing focused on developing a central bank digital currency (CBDC). The senator slammed Bitcoin and altcoins over pollution, ransomware attacks, and the role they play in aiding scams. She also discussed Bitcoin’s energy consumption.
Warren condemns investment in Bitcoin and all cryptocurrencies
Referring to crypto as “a lousy investment,” Warren said digital coins are “fourth-rate alternatives to real cryptocurrency.” She also mentioned that crypto is a “haven for illegal activity.” Warren further talked about the volatile nature of cryptocurrencies, and she believes that digital currencies are dangerous to the economy. According to the senator, Dogecoin surged more than ten times in two months and then shed about 60 percent. She said crypto may suit speculative traders, but it is inappropriate for people seeking normal sources of value to receive payments or use in everyday expenses.
Although she specifically criticized Bitcoin and Dogecoin, Warren said almost all the cryptocurrencies in existence are highly volatile. As a result, she noted that crypto is difficult to consider as a medium of exchange. She explained that digital currencies need more regulation as they are currently not a “good investment and an environmental disaster.” She added that the government needs to discuss with the US Securities and Exchange Commission (SEC) regarding crypto regulations. In response to bringing Bitcoin and other cryptos into the monetary system and about banks holding BTC, Warren said the issue should be discussed with banking regulators.
U.S. Senator Elizabeth Warren says cryptocurrencies need more regulation.
— Bloomberg Crypto (@crypto) June 10, 2021
Additionally, Warren discussed the lack of security for crypto holders. She said the absence of protection laws for customers leaves them helpless in case of scams. She stated that every successful hack by scammers is “an advertisement” for more hackers to run off with people’s funds.
Bitcoin energy usage
Furthermore, Warren spoke on the high energy usage of Bitcoin among other cryptocurrencies. She explained:
Bitcoin consumes more energy than entire countries. And it is projected to consume as much energy as all the data centers in the whole world this year. One Bitcoin transaction, a single purchase, sale, or transfer uses the same amount of electricity as the typical US household uses in more than a month.
Ahead of Warren’s comment, Tesla CEO Elon Musk had earlier slammed Bitcoin over its energy consumption. Similar to the senator’s claim, Musk said that Bitcoin’s energy usage is harmful to the environment. In reaction to Musk’s comment, Bitcoin dropped significantly, resulting in last month’s crash in the crypto market.
At the same time, an analysis by Cambridge University revealed more details on Bitcoin energy usage. The analysis suggested that Bitcoin’s annual energy consumption is more than the energy usage of the whole of Argentina.
Despite the criticisms on Bitcoin and other cryptocurrencies, Warren supports a US-backed digital currency that is subject to regulation.
Legitimate digital public money could help drive out bogus digital private money. It could help improve financial inclusion, efficiency, and the safety of our financial system if that digital public money is well-designed and efficiently executed, which are two very big ‘ifs’.
At the time of writing, Bitcoin is up 9.25 percent to $38,242.
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