During a recent US Senate Finance Committee meeting, Senator Michael Bennet of Colorado expressed his concern over banks that work with cryptocurrencies, citing the industry’s extreme volatility as a reason for caution.
Specifically, he referenced the recent failure of Signature Bank, suggesting that the institution’s downfall was due in part to its deposits in cryptocurrency companies.
Senator Bennet likened these companies to pharmacies selling medical marijuana, noting that while marijuana is legal in many US states, it remains illegal at the federal level.
According to him, even the sale of marijuana is more stable than the cryptocurrency industry, which he believes is notoriously volatile and poorly understood.
“Digital assets are a notoriously volatile thing that no one here understands. These are assets with a high level of risk because their value can both soar and collapse,” said Senator Bennet.
While some, like Signature Bank board member Barney Frank, believe that regulators are unfairly targeting the cryptocurrency industry, Senator Bennet remains convinced that banks must exercise caution when working with these high-risk assets.