“Cryptocurrency FUD” – industry outraged by White House report criticizing cryptocurrency – CrypLogger.com
“Cryptocurrency FUD” – industry outraged by White House report criticizing cryptocurrency – CrypLogger.com
Crypto executives have expressed annoyance at the latest White House economic report, which, in particular, has an entire chapter devoted to doubts about the merits of digital assets.
The President’s economic report, released on March 20, marks the first time the White House has included a section on digital assets since it first began issuing an annual economic policy report in 1950.
Fred Ehrsam, co-founder of digital asset investment company Paradigm, noted that 15% of the economic report is devoted to “cryptocurrency FUD.”
The report includes 35 pages debunking the “perceived attractiveness of crypto assets” as well as a small section on the FedNow payment system and central bank digital currencies (CBDCs).
The report’s main argument is that cryptocurrency assets fail to realize their “advertised” benefits such as improved payment systems, financial inclusion, and the creation of mechanisms for the transfer of value and intellectual property, stating:
“Instead, their innovations have mostly been about creating artificial scarcity to support the prices of crypto assets, and many of them have no fundamental value.”
It also argues that cryptocurrencies cannot function as sovereign money like the US dollar because the prices of cryptocurrencies fluctuate too much to be a stable store of value, nor can they function as a unit of account or medium of exchange. Extract from Chapter 8: Digital Assets: Rethinking Economic Principles Source: Presidential Economic Report
The report also targets stablecoins, which are said to be at risk and thus too risky to fulfill their role as a “fast payment” tool.
Blockchain Association CEO Christine Smith called the latest presidential report “disappointing”, saying it shows that some in government are becoming “increasingly allergic” to the growing cryptocurrency industry, adding:
“We urge the Biden administration to think about how he will be remembered: as a leader in deep innovation or as an obstacle to a global technological revolution.”
Decentralization is also highlighted in the report, which claims that “Despite claims of decentralization and lack of trust, blockchain-based applications are not, in practice.”
Users gain access to crypto assets by moving to a limited set of crypto asset platforms, while a small group of miners do most of the mining of most crypto assets, it claims.
Related: House Republicans directly criticize Biden administration for digital asset policy
The latest annual economic policy report was published about two weeks after the collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank – all three of which served aspects of the cryptocurrency industry.
Dan Rieser, director of development for decentralized finance (DeFi) platform Acala Network, claims that the report came “only a few days” after Operation Chokepoint 2.0 was rolled out to crypto-backed banks. Source: Twitter
He also noted “clear early warning” about the impending release of the CBDC, or US digital dollar, citing a section of the report that appears to tout the benefits of a US central bank-controlled currency.
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