Early this month, Elizabeth Warren of the US Senate recently blasted the world’s largest cryptocurrency. The financial expert claimed that Bitcoin has no real value because no government backs it. Elizabeth Warren further stated that she gives the flagship currency a lower fair value than tangible items like art.
According to the Senator, Bitcoin holders retain their cryptocurrency based on a belief that the value would increase. The Massachusetts senator also insinuated that CBDCs could stand out over cryptocurrencies since the government backs them.
As expected, Elizabeth Warren’s view of Bitcoin has gathered much criticism from the crypto community. The US Senator has been called out for not seeing the benefits of Bitcoin. Crypto community members are strongly against centralization. Bitcoin has sometimes been tagged “pure money” since it isn’t backed or controlled by the government. Further, Bitcoin has a limited supply of 21 million. Thus, the cryptocurrency will forever be free of devaluation caused by cash injection.
CBDCs – An Excellent Innovation or an Unnecessary Evil?
Interestingly, most governments are more open to central bank digital currencies than cryptocurrencies. The reason for this is an open secret – CBDCs can be tracked and regulated. On the other hand, cryptocurrencies cannot be controlled by the government.
Currently, the US and UK have plans to develop a working national digital currency in the distant future. Notably, the Bahamas, Cambodia, China, and Nigeria have already launched their e-currencies. Despite the successful launch of these government-backed digital currencies, national adoption has been a huge challenge. As it stands, the digital Yuan used in a few states in China seems to be the most successful digital currency globally.
Will the United States Embrace CBDCs and Cryptocurrencies?
Notably, just like with cryptocurrencies, the US Senate members have varying views on CBDCs. Although CBDCs still stand a higher chance of gaining governmental backing than cryptocurrencies. In the last few years, some Senators have shared positive sentiments on cryptocurrencies and blockchain technology, while others have been critical of their potential.
For example, Senators Cynthia Lummis and Ron Wyden have been vocal advocates for cryptocurrencies and blockchain technology, with Lummis stating that she sees Bitcoin as a good store of value and a hedge against inflation. In contrast, Senator Elizabeth Warren is a strong crypto antagonist, arguing that they are used for illicit activities and that their lack of regulation poses significant risks to investors.
The Senate has shown an increasing interest in cryptocurrencies and their potential impact on the financial system. Interestingly, some Senators have introduced legislation related to cryptocurrencies, such as the Token Taxonomy Act and the Blockchain Promotion Act.