Senator Elizabeth Warren of Massachusetts is one of the government’s strongest sceptics of bitcoin. The bitcoin sector is referred to as the “new shadow bank” by her.

According to a recent interview in the New York Times, the arrival of cryptocurrencies into the financial business generated a stir in Washington. Regulators, according to reports, are attempting to catch up with a market dominated by loans.

As banks struggle to give loans to individuals and businesses interested in Bitcoin and other digital assets, some of the major non-bank cryptocurrency startups, including BitGo, BlockFi, Galaxy Digital, and Genesis, are stepping in to meet investor demand the dollar. Hedge funds can buy Bitcoin at the current spot price and sell July futures, allowing them to profit if Bitcoin drops.

As a result, on March 15, a 7.7% spread between the spot and futures prices was locked in. The annual return is comparable to 21% in the 137 days between March 15 and July 30, when the futures contract expires. Warren noted that the cryptocurrency business provides “much of the same services as shadow banking,” but that it still lacks “consumer protections or financial stability that back up the traditional system.”

A stable coin is a cryptocurrency whose value is linked to the value of other assets, such as fiat currencies like the US dollar and euro, or commodities like gold. Many US officials, including SEC Chairman Gary Gensler, have long emphasised investor protection as a top priority.

He has also repeatedly advocated for increased investor protection, which may only serve to alleviate the situation. Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), has been at the centre of regulatory debate. Gensler is well-versed in the market and technology, and he has taught this course at MIT.

He was not, however, so forgiving as to believe that some significant changes should not have occurred. The US Securities and Exchange Commission continues to maintain ETF approval while it reviews this rule. There are currently more than a dozen ETFs on your plate, but the signs are that sooner or later, a decision will be made.

Image Credits: CNBC

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