The chairman of the Senate Banking Committee said cryptocurrencies should not be considered a “legitimate form of money” following a flurry of Super Bowl ads promoting the digital assets.
Sen. Sherrod Brown‘s remarks came during a hearing Tuesday on stablecoins. The Democrat argued that the government should implement increased regulations against the digital currencies because they are often rife with “fraud, the scams, and outright theft.”
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“If you watched the Super Bowl on Sunday, you saw ad after ad for a product that most Americans have heard of but almost nobody knows what it really is,” he said. “I don’t think I’ve ever seen in 40 years of Super Bowl watching the Federal Reserve buy a multi-million commercial for U.S. dollars. That’s because crypto isn’t money. It’s designed for speculation. Watching those ads reminds us of a lot of asset bubbles we’ve seen before.”
Brown said he believes most people are not adequately informed on how cryptocurrencies work. He noted that cryptocurrencies tend to be exceptionally volatile with rapid shifts in value, making them difficult to use as a currency.
The Super Bowl featured at least four ads from cryptocurrency companies including Coinbase, eToro, FTX, and Crypto.com. The Coinbase ad simply displayed a QR code and generated so much traffic to the website that it temporarily crashed. Comedian Larry David and NBA star LeBron James made appearances in some of the other crypto ads.
During the hearing, Brown said the Super Bowl in 2000 featured ads from 14 technology startup companies that mostly failed after the dot-com bubble burst. He said only four of those companies were still around. He also expressed concerns about cryptocurrency companies slapping high fees on consumers.
CRYPTO: Sen. Sherrod Brown: “The fact that these companies felt the need to advertise at all is a bit of a giveaway about one of their major claims. If this were actually meant to be used as a currency, why would you need to buy ads?” pic.twitter.com/WrZw1X2tex
— Forbes (@Forbes) February 16, 2022
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The hearing focused on stablecoins, which are cryptocurrencies that attempt to peg their value to a “stable” external reference such as the U.S. dollar. Brown said most Americans have not bought into stablecoins yet and suggested that the United States regulate the digital product before it does “damage” to the economy.
“Last fall, the Treasury Department led a team of our financial regulators to conduct a report on stablecoins. This report makes it clear that without regulation, stablecoins can endanger our economy,” he said. “The companies claim the stablecoin is backed by real money and that’s what makes it stable. But our regulators have tested that claim by a giant stablecoin issuer, and that issuer ended up paying nearly $60 million in fines because it lied about its reserves.”
