United States Senator Elizabeth Warren, one of the virtually vocal cryptocurrency skeptics in the U.Southward. government, has chosen the cryptocurrency industry the "new shadow bank."

In a Dominicus interview with the New York Times, Warren said that the cryptocurrency industry offers "many of the same services" as shadow banks but still lacks "consumer protections or fiscal stability that back up the traditional system."

Warren expressed concerns over the rapidly growing market for stablecoins, a type of cryptocurrency whose value tin can be pegged to that of other assets, including fiat currencies similar the U.South. dollar, the euro or commodities similar golden.

The senator said that it'south "worth considering" banning U.Due south. banks from holding the reserves to back private stablecoins, a move that "could finer finish the surging market."

The total market capitalization of stablecoins like Tether (USDT) and USDC Coin (USDC) has surged parabolically this year, jumping from around $37 billion in January to $123 billion at the time of writing, co-ordinate to data from Statista and CoinMarketCap, respectively. Large stablecoin accumulations accept been widely perceived equally an indicator of buying ability for cryptocurrencies like Bitcoin (BTC) every bit fiat-pegged stablecoins enable a tool for traders to easily deposit on exchanges to purchase and sell crypto.

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Warren'south latest remarks come up equally global financial regulators pay more than attention to stablecoins similar USDT. Co-ordinate to online reports, the Ontario Securities Commission has recently banned USDT trading services by Canada'southward start two registered crypto exchanges, Wealthsimple and Coinberry. In mid-July, U.S. Treasury Secretary Janet Yellen called on financial authorities to institute a proper regulatory framework for stablecoins.