For Immediate Release:
Contacts:
CFA Media Relations:
media@consumerfed.org
Prior to the Senate Banking Committee’s Wednesday hearing on Digital Assets, the Consumer Federation of America released a report entitled “The Very Real Dangers of Adopting Virtual Money”. As the Senate considers alarming legislation mixing volatile and unstable assets into the financial system millions of American families depend on, the report raises the serious threats to financial stability and integrity of the financial system the legislation would present. The report further details the long history of stablecoins failing to hold their value, the risks of exposing banks to events like the $1.4 billion Bybit hack that occurred just last Friday, and the enormous financial benefits to be reaped by President Trump and Elon Musk’s financial interests in digital payments businesses.
“Congress should ask itself why it would risk undermining hard-earned trust in American markets by further enabling the financial conflicts of political leaders already undermining the rule of law,” said Corey Frayer, Consumer Federation of America’s Director of Investor Protection.
As the report points out, “…President Trump and Elon Musk, stand to benefit handsomely from stablecoin adoption.” The President’s World Liberty Financial and Musk’s proposed digital wallet and payments system partnership with Visa are just two of the many conflicts of interest they have across the government.
“Any one of President Trump or Elon’s conflicts of interests, stablecoins’ habit of failing to hold their value, or last week’s $1.4 billion Bybit hack are each red flags that this technology is underdeveloped, unstable, and unusable. What else will it take for Congress to realize crypto is not ready to be part of a modern, digitized financial system.”
As the Senate Banking Committee considers the further integration of digital assets into the financial system, policymakers must act with caution. The risks to investors, financial stability, and consumer protections are too great to ignore. We urge lawmakers to reject any proposals that compromise financial integrity and to prioritize strong investor safeguards.
To fully understand the risks and conflicts at play, we encourage legislators, regulators, and the public to read our report, The Very Real Dangers of Adopting Virtual Money.