Sen. Warren Reveals Plans For A Central Bank Digital Currency, Blames Crypto For Climate Change
At a Wednesday hearing, Sen. Warren delivered remarks on Digital Currency called ‘Building A Stronger Financial System: Opportunities of a Central Bank Digital Currency’
“Bitcoin requires so much computing activity that it eats up more energy than entire countries. One of the easiest and least disruptive things we can do to fight the #ClimateCrisis is to crack down on environmentally wasteful cryptocurrencies,” Elizabeth Warren shared to Twitter on Wednesday.
“This is a bipartisan hearing – in fact, it was Ranking Member Kennedy’s suggestion to hold it – and I want to thank him and I want to thank his team for working so closely with us to get it put it together,” Warren stated.
“Now, the core subject of this hearing is not Bitcoin, or Dogecoin, or any other cryptocurrency. Instead, it’s the explosion of cryptocurrencies over the last decade, that has created the context for understanding the potential value and risks of digital currency,” Warren continued.
“There are substantial difficulties with our current payment system. Nearly 33 million Americans have been locked out of the traditional banking system. They’re forced to use check cashers and payday lenders for basic banking services. And even those with traditional checking and savings accounts find that many of the largest banks have proven to be untrustworthy, gouging customers for overdraft or other fees or, in the case of Wells Fargo, just outright cheating their customers with fake accounts and fake services for which customers paid dearly,” Warren also shared.
Warren explicitly called digital currencies as a group of “lousy investments.”
“Cryptocurrencies have turned out to be a fourth-rate alternative to real currency. First, cryptocurrencies are a lousy way to buy and sell things. Unlike the dollar, their value fluctuates wildly depending on the whims of speculative day traders. You know, in just the last two months, the value of Dogecoin increased by more than ten-fold and then declined by nearly 60%. Now that may work for speculators and fly-by-night investors, but not for regular people who are looking for a stable source of value to get paid in and to use for day-to-day spending. Second, crypto is a lousy investment. Unlike, say, the stock market, the crypto world currently has no consumer protection – none. As a result, honest investors and people trying to put aside some savings are at the mercy of fraudsters,” Warren stated.
Warren also blamed digital currencies as contributors to global climate change due to its energy use.
“Finally, there are the environmental costs of crypto. Many cryptocurrencies are created through “proof-of-work” mining. It involves using computers to solve useless mathematical puzzles in exchange for newly minted cryptocurrency tokens. Such mining has devastating consequences for the climate. Some crypto mining is set up near coal plants, spewing out filth in return for a chance to harvest a few cryptocoins. Total energy consumption is staggering, driving up demand for energy. If, for example, Bitcoin – just one of the cryptocurrencies – were a country, it would already be the 33rd largest energy user in the world – using more energy yearly than all of the Netherlands,” Warren said.
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