During a recent chat on CNBC's Squawk Box, U.S. Senator Elizabeth Warren, who is a member of the Senate Banking Committee, discussed crypto and healthy ways to regulate it.
The conversation also touched on the wealth tax when it comes to taxing wealth earned on cryptocurrencies.
"CBDCs can help millions of unbanked people"
When asked by anchor Andrew Sorkin whether crypto will be able to disrupt the modern financial system in a positive way, Warren stated that digital currencies are interesting, and central bank digital currencies (CBDCs) are interesting in particular.
CBDCs may come in handy when it comes to millions of people who are unbanked or underbanked. Warren called this "an enormous failure by the big banks" as they are unable to reach consumers across the U.S. and provide them with banking services.
Therefore, digital currencies could be an answer here, she said.
"One of the things I think is very interesting is digital currency," says @ewarren. "There has been an enormous failure by the big banks to reach consumers all across the country...digital currency and central bank digital currency may be an answer there." pic.twitter.com/sCVum1GGe2— Squawk Box (@SquawkCNBC) July 28, 2021
Later, she admitted the presence of numerous problems in the global financial system right now, and in the U.S. in particular. In order to enhance the adoption and regulation of crypto, according to the senator, the industry must find ways to improve the design of crypto for the benefit of the system and to prevent new risks that cryptocurrencies may "contribute" to it.
Wealth tax on crypto
When asked whether the wealth tax that Warren is touting at the moment should be paid by those who have made a fortune on crypto, and if it should be collected in a different fashion than those who have gotten rich in real estate or on other traditional assets, the senator said that it does not matter.
The wealth tax, she emphasized, should be collected on wealth regardless of what assets it is stored in: real estate, Amazon shares or cryptocurrencies.
"I want to see us tax wealth, however your wealth is tied up it shouldn't make a difference," says @SenWarren on a wealth tax for #crypto. "Whatever form you have your assets ... I think there ought to be a tax on that annually." pic.twitter.com/jXUBFCf13O— Squawk Box (@SquawkCNBC) July 28, 2021