Crypto executives have expressed irritation at the White House’s recent economic report — which notably includes an entire chapter devoted to casting doubt on the value of digital assets.
The President’s Economic Report, released March 20, is the first time the White House has included a section on digital assets since the annual Economic Policy Report began to be released in 1950.
The co-founder of digital asset investment firm Paradigm, Fred Ehrsam, noticed that 15% of the economic report was dedicated to “crypto-FUD”.
The report has 35 pages devoted to debunking the “perceived appeal of crypto assets” and a brief section on the FedNow payments system and central bank digital currencies.
The report’s main argument is that crypto assets are not delivering on their “touted” benefits, such as: B. improving payment systems, financial inclusion and creating mechanisms for the transfer of value and intellectual property.
“Instead, their innovation has been largely about creating artificial scarcity to support crypto asset prices – and many of them have no fundamental value.”
It is also argued that cryptocurrencies fail to perform the functions of government money – like the US dollar – as crypto prices fluctuate too much to be a stable store of value, nor can they function as a unit of account or medium of exchange.
Excerpt from Chapter 8: Digital Assets: Relearning Economic Principles Source: President’s Economic Report
The report also targets stablecoins, arguing that they are subject to run risks and are therefore too risky to live up to their role as a “quick payments” tool.
Blockchain Association CEO Kristin Smith called the recent presidential report “disappointing” and said it shows that some in government appear to be “increasingly allergic” to the burgeoning crypto industry, adding:
“We urge the Biden administration to consider how it will be remembered: as a leader of deep innovation or as an obstacle to a global technology revolution.”
Decentralization is also highlighted in the report, which argues that “despite claims to be decentralized and trustworthy, blockchain-based applications are not practiced in practice either.”
Users access crypto assets by going to a limited number of crypto asset platforms, while a small group of miners do most of the mining in most crypto assets, it is argued.
Related: House Republicans are directly criticizing the Biden administration for its digital asset policies
The latest annual economic-policy report came about two weeks after the collapse of banks Silvergate, Silicon Valley and Signature — all of which had served three aspects of the crypto industry.
Dan Reecer, chief growth officer at decentralized finance platform Acala Network, claims the report comes “just days” after Operation Chokepoint 2.0 was executed on crypto-friendly banks.
Source: Twitter
He also noted an “apparent early warning” of an impending United States CBDC, or digital dollar, pointing to a section of the report that appears to herald the benefits of a US Federal Reserve-controlled currency.
Related: Unstablecoins: Depegging, bank runs and other risks loom