Stablecoins are intended to address the volatility of cryptocurrencies, but they are not decentralised, and the activities of their issuers are not transparent, said Sherrod Brown, chair of the U.S. Senate Banking Committee.<\/p>\n
During the hearings<\/a> on the topic \u201cStablecoins: how they work, how they are used and what their risks are,\u201d the senator acknowledged that Americans are seeking an alternative to the traditional banking system. In his view, crypto has not provided one and will not be able to.<\/p>\n \u201cInstead, we have witnessed wild financial speculation,\u201d Brown added.<\/p>\n<\/blockquote>\n Most cryptocurrencies are unsuitable for payments due to volatility and high transaction fees, the politician noted. Stablecoins are meant to solve this problem, but they are neither decentralised nor transparent, he noted.<\/p>\n Brown argues that these assets create a link between the real economy and what he called a \u201cfantasy economy.\u201d<\/p>\n \u201cStablecoins like nothing else enable people to risk real money on a volatile crypto market,\u201d he said.<\/p>\n<\/blockquote>\n \u201cStablecoins pose a risk to investors of losing money in another bubble and should be tightly regulated,\u201d the senator argues.<\/p>\n \u201cHistory tells us we should be very concerned when investments become so detached from reality,\u201d Brown said, recalling the crashes of 1929 and 2008.<\/p>\n<\/blockquote>\n Senator Pat Toomey offered a somewhat different view. He noted that stablecoins are an important innovation capable of speeding up and cheapening payments, bringing other benefits to business, and helping develop the digital economy.<\/p>\n\n
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