US senator says DeFi is the most dangerous part of the crypto world
US Senator Elizabeth Warren shared her point of view on the Defi industry that possesses huge risk factors.
The concept of Decentralized Finance ( DeFi) was introduced in 2020 and from 2020 to 2021 it was a disaster for the crypto industry because it was a new concept for the new crypto projects. However, at present, DeFi projects are no more popular but still majority of the new crypto projects are entering this crypto space with the idea of Defi, CeFi & NFTs altogether. Availability of the crypto asset to only Centralized exchange is not sufficient to have a better reputation. Most of the experienced crypto traders consider those crypto projects for investment, which have an existence in Defi as well as CeFi. However there are many things in Defi, which come with several advantages but there are many things, which are associated with very high-risk factors.
Speaking on the U.S. Senate Banking, Housing, and Urban Affairs Committee on DeFi and Stablecoins, US Senator Elizabeth Warren raised her voice against the Defi industry.
According to Elizabeth, the Defi industry is a much risky part of the crypto industry. Because in the Defi platforms, no one can figure out if he is dealing his assets with a genuine person or not.
“no surprise it’s where the scammers and the cheats and the swindlers mix among part-time investors and first-time crypto traders…In DeFi someone can’t even tell if they’re dealing with a terrorist.”
Elizabeth also noted the role of stablecoins in DeFi projects and said that it is main backbone of all Defi crypto projects. She said that “Stablecoins provide the lifeblood of the DeFi ecosystem”.
In this way, Elizabeth tried to target the regulation of stablecoins, to restrict their use in unfair ways. She added:
“Without stablecoins DeFi comes to a halt.”
Through all overstatements, Elizabeth stressed that Stabelcoins regulation is much-needed work for now, by the regulators. In this situation, stablecoins are under no regulation and no guarantor to ensure the loss, so needed to work on the Stablecoins first.
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