U.S. Senator Elizabeth Warren lasted week asked U.S. policymakers to tackle the issues of accessibility for the growing use of cryptocurrency. It has said that a Federal Reserve-backed digital currency shows “great promise.” 

What is the history behind it? 

Warren, a prominent Wall Street critic and consumer advocate, stated cryptocurrency's promise of enhancing everyday Americans has failed to materialize. Instead, the government must act to address a host of problems. 

She stated at a congressional hearing "Cryptocurrency has created opportunities to scam investors, assist criminals, and worsen the climate crisis". Warren threw care behind the Federal Reserve's consideration of a digital dollar. It says that could increase poorer Americans and streamline the payments system if properly designed. 

Though, Republicans hit a much warmer tone, questioning whether such a Fed-backed product is even essential and what it might mean for the traditional banking system. "We don’t need a state-sponsored bank interfering with this successful free-enterprise system," stated Senator Pat Toomey. He instead urged sustained growth of private digital currencies. 

The hearing held by the Senate Banking Committee was one of the most attentive debates yet in Congress on the implications of a Fed-backed digital currency. The central bank has thought it is exploring the issue, as global counterparts, run by China, take steps to found their digital currencies. 

The discussion in Washington is important because Fed Chair Jerome Powell has said the central bank will not continue with a digital currency without support from Congress. 

Talking over what she labelled as “bogus” currency, Warren cited Dogecoin (DOGE) as an instance of many cryptocurrencies’ volatility making them inappropriate as a medium of exchange in her opinion. She named out pump and dump schemes and other seeming efforts to manipulate the values of certain tokens. 

U.S. lawmakers may be alerting to a central bank digital currency (CBDC)- 

Though, CBDCs drew some of the attention through last week Senate Banking Committee hearing, the issues around bitcoin. It drew far more care from the group of lawmakers, led most frankly by Sen. Elizabeth Warren (D-Mass.).