United States Senator Elizabeth Warren, one of the most vocal cryptocurrency skeptics in the U.S. government, has called the cryptocurrency industry the “new shadow bank.”
In a Sept. 5 interview with the New York Times, Warren said that the cryptocurrency industry offers “many of the same services” as shadow banks, but still lacks “consumer protections or financial stability that back up the traditional system.”
Warren expressed concerns over the rapidly growing market for stablecoins, a type of cryptocurrency whose value can be pegged to that of other assets, including fiat currencies like the U.S. dollar, the euro, or commodities like gold.
The senator said that it’s “worth considering” banning U.S. banks from holding the reserves to back private stablecoins, a move which “could effectively end the surging market.”
The total market capitalization of stablecoins like Tether (USDT) and USDC Coin (USDC) has surged parabolically this year, jumping from around $37 billion in January to $123 billion at the time of writing, according to