A senator says: "If this were actually meant to be used as currency, why would you need to buy ads? I've never seen the Federal Reserve buy a multimillion-dollar commercial for U.S. dollars."
Crypto advocates have long argued that Bitcoin is a currency — but according to one U.S. senator, the stream of ads for exchanges during the Super Bowl proves that this isn't the case.
Sherrod Brown — who chairs the U.S. Senate Committee on Banking, Housing and Urban Affairs — argued during a hearing:
"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 currency, why would you need to buy ads? I've never seen the Federal Reserve buy a multimillion-dollar commercial for U.S. dollars."
With Coinbase, FTX, Crypto.com and eToro among the companies spending millions of dollars to reach fans during the Super Bowl, Brown warned that the advertising spree drew parallels to other asset bubbles — and doubled down on his assertion that "crypto isn't money, it's designed for speculation." He added:
"The 2000 Super Bowl featured 21 ads from 14 different dotcom start-ups. The internet may have been the next frontier, but those companies weren't — many of them were defunct within a year or two, and just four are still around today. We're here today because once again, real people’s real money is at risk. We need to look beyond the unproven promises, and protect Americans and our entire financial system."
Coinbase's chief marketing officer shrugged off this comparison to the dotcom bubble in a Q&A posted on the exchange's blog — describing the uptick in advertising as "yet another signal that crypto is bursting into the mainstream, and at the center of the cultural zeitgeist."
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Stablecoins in Focus
Brown was giving an opening statement at a hearing called "Examining the President's Working Group on Financial Markets Report on Stablecoins."
He also warned that many Americans who have invested in cryptocurrencies "often don't really understand it" — and claimed exchanges are "desperate" to reach as many Americans as possible in their quest for big profits:
"The ads left a few things out. They didn't mention the fraud, scams, and outright theft. The ads didn't point out that you can lose big in crypto's huge price swings. They didn't tell you about the high fees pocketed by the crypto companies. And they sure didn't explain that crypto markets lack basic investor protections and oversight."
Brown also expressed deep cynicism for stablecoins — and claims that "what they've built is as good as real money."
Warning that Americans "should look carefully at these promises," he pointed to how one issuer ended up paying tens of millions of dollars in fines because it lied about its reserves — and for over two years, "it was only really 'backed' 28% of the time." Brown went on to warn:
"If you saw a Super Bowl ad and figured you'd give [crypto] a try, and you change your mind and want to exchange your stablecoin for dollars, you might be out of luck. The website could be down. Your money could be trapped."
Brown wrapped up his remarks by stressing that he understood the appeal of crypto as "Americans have been burned over and over again by Wall Street" — with the financial crisis and punishing fees eroding trust in big banks. He even described some of the ads that appeared on Super Bowl Sunday as "compelling television."
But his overarching point was that Congress had failed to heed warnings before the financial crisis, meaning banks got a bailout and "working people paid the price," adding:
"As our economy continues to recover from COVID-19 — as workers are finally starting to see higher wages and more bargaining power in the workplace —the last thing we need is for a risky new financial product to cause disaster."
