US Senate hearing criticises Bitcoin, praises CBDC

The Senate Banking Committee called for further regulation of DeFi, while emphasising the importance of the Digital Dollar project

The US Senate Banking Committee hearing focused largely on Central Bank Digital Currencies (CBDCs) in the wake of early Digital Dollar planning, but also saw a discussion on DeFi in the wake of El Salvador’s Bitcoin adoption as legal tender. The Massachusetts Senator, Elizabeth Warren (Dem.) expressed sharp criticism of Bitcoin, calling the crypto sector a “wild west”. As she opened the hearing she stated:

If you want to send money to somebody else, digital currency can be easier and faster, but in order for those advantages to be realized, the digital version needs to be secure, stable and accepted everywhere.

The instability of Bitcoin’s price calls for more regulation, in her opinion. Senator Warren also criticised the detrimental damage of crypto mining to the environment, with Bitcoin having a similar carbon footprint to that of the entire Netherlands.

However, there was unanimous agreement among the present speakers that the Digital Dollar project will be highly beneficial to citizens. Ohio Senator Sherrod Brown (Dem.) emphasised DeFi advantages to be accessible to Americans in a more secure way through a CBDC:

Americans shouldn’t have to pay exorbitant fees just to use the money they’ve already earned. A central bank digital currency can work with these no-fee accounts to make sure working families have access to the payment system and full participation in our economy.

Additionally, competition with China, which is highly advanced in their Digital Yuan project, drives the urgency of a Digital Dollar. The director of the Digital Dollar Foundation, Chris Giancarlo, argued the digitalization of the US monetary system will help the Dollar to maintain its status as global reserve currency, as was reported by CoinDesk.

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