Bitcoin’s woes are far from over as the US Senate Banking Committee lashed out at the cryptocurrency’s ‘phony’ populism. The Committee placed crypto on trial during a hearing titled “Cryptocurrencies: what are they good for?.”

Sen. Elizabeth Warren (D-Mass.) answered this question with a passionate “nothing” and proceeded to argue for tighter regulations in the industry. Other Democrat committee members echoed the same sentiment, with many of them depicting the crypto industry as fraudulent, hypocritical, and predatory.

This Senate hearing is one of many congressional inquiries into the prospects of handling crypto’s growing influence in the US financial system.

Bitcoin decentralization a ‘fantastical narrative’

Warren added how the concept of decentralized Bitcoin is nothing but a sham since the industry’s real power brokers are corporations and miners who falsely claim a moral advantage over the giant banking industry.

In reality, Warren adds, bitcoin is not much better; it could even be worse than giant banks. 

The Committee called three witnesses to shed light on the issue – Professor Angela Walch of the St. Mary’s School of Law, Mara Belcher, Filecoin Foundation chair and blockchain advocacy group head Jerry Brito of the Coin Center. 

As Walch depicted crypto as a land mine that will destroy traditional financial payment systems, Belcher defended crypto and spoke out against what she considers the “myth” that bitcoin and crypto are not regulated.

Sen. Sherrod Brown (D-Ohio), Committee Chair, likened the crypto industry to a fraudulent digital slot machine with zero accountability that “enriches its creators and burns everyone else.” In the end, the industry poses a danger not only to American consumers but also to the entire financial system. 

Warren explained that with crypto brokers in pay, the financial system would be placed on the caprices of “some shadowy faceless group” of miners and coders. 

Brown also criticized the crypto industry as undemocratic because of a complete absence of transparency, going so far as calling it a “network of online funny money.” That said, the Committee on Banking chair advocated for stricter regulations to defend consumers from the extortionists and “phony populist marketing” that breathes life to crypto.

Debates on decentralization, ransomware

Meanwhile, as the Senate hearing raged, members of the House started debates on central bank digital currencies and ransomware. These congressional inquiries prove how crypto’s increasing influence is prompting a rethinking of cybercrime and monetary policies.

On one end of the political spectrum, Democrats are highly critical of crypto’s influence and want it eliminated. At the other end, Republicans, who are also cryptocurrency investors, offer a more cautious approach. For instance, Sen. Pat Toomey (R-Pa.) said that while there are valid concerns about bitcoin and other crypto assets, blockchain technology’s advantages should not be discredited.

Several senators are also wary of the decentralized finance (DeFi) wave. Sen. Tina Smith (D-Minn.) explained that most DeFI instruments are illegal as they violate US commodities law. Meanwhile, Smith also threw punches on bitcoin’s hypocritical stance on being environmentally friendly, stating that the digital asset’s carbon footprint is substantial.