Senate Banking Committee Hearing on 2/14: Safeguarding the Financial System Amid the Cryptocurrency Storm

The U.S. Senate Banking Committee will hold a hearing on February 14 at 10 a.m. ET titled "Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets" to examine the protection of the financial system from risks associated with digital assets.

Exploring the Risks and Protections of Cryptocurrency

Senator Sherrod Brown, chairman of the Banking Committee, recently unveiled this agenda. He had expressed concerns to Treasury Secretary Yellen last November about the FTX incident, which exposed consumers, investors, and the financial system to risks.

He believes that it is crucial to prevent the spillover effects of the cryptocurrency market from affecting the financial system.

Sherrod Brown remains skeptical about cryptocurrencies and stated at a Federal Deposit Insurance Corporation hearing:

We cannot allow thousands of high-risk and volatile assets used only for speculation and sanctions to flow into our banking system; this is a national security issue.

White House Aligns: Segregating Cryptocurrency Risks

The Biden administration also issued a cryptocurrency risk plan at the end of January, requiring banks to segregate cryptocurrency risks.

The White House specifically pointed out that legislation should not allow mainstream institutions like pension funds to dive headfirst into the cryptocurrency market. If Congress moves in the opposite direction and connects cryptocurrencies with the broader financial system, it would be a serious mistake.