Crypto FUD’ Industry Outraged As White House Report Slams Crypto
Cryptocurrency executives have expressed frustration over the White House’s recent economic report. In particular, it includes an entire chapter that addresses questions about the value of digital assets.
The presidential economic report, released on March 20, is the first time the White House has included a section on digital assets since the annual monetary policy report was released in 1950.
Fred Ehrsam, the co-founder of digital asset investment firm Paradigm, noted that 15% of economic reports are devoted to “crypto-FUD.”
As FEhrsam recently Tweeted;
The report contains 35 pages to debunk the “perceived appeal of crypto assets” and a short section on the FedNow payment system and central bank digital currencies.
The report’s main argument is that cryptocurrencies have the following “touted” benefits: Creating mechanisms for improved payment systems, financial inclusion, and transfer of value and intellectual property.
“Instead, their innovation is primarily creating artificial scarcity to underpin cryptocurrency prices. Many of which have no fundamental value.”
In addition, the price of virtual currency is too volatile to be a stable store of value, so it cannot function as a government currency like the US dollar, nor can it function as a unit of account or a medium of exchange. It is claimed that it cannot.
The report also targets stablecoins, arguing that they are exposed to execution risk, making them too risky to serve as a “quick payment” tool.
Blockchain Institute CEO Christine Smith called the latest presidential report “disappointing” and said some within the government were “increasingly allergic” to the burgeoning cryptocurrency industry. It shows that it looks like it has,” he added.
“We urge the Biden administration to consider ways to commemorate it. As a leader in disruptive innovation or as a disabled person in the global technology revolution.”
Decentralization is also highlighted in the report, claiming that
“Despite its claims to be decentralized and trustworthy, blockchain-based applications are also not really practiced.”
Although users access cryptocurrencies by visiting a limited number of cryptocurrency platforms, it is claimed that a small group of miners do most of the mining of most cryptocurrencies.
The latest annual economic policy report comes out about two weeks after the failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank. All of these banks contributed to his three facets of the crypto industry.
Dan Reecer, chief growth officer at decentralized finance platform Acala Network, claims the report was released “just days after” Operation Chokepoint 2.0 went into effect at the crypto-friendly bank increase.
He also referred to the “obvious early warning” of an impending US CBDC or digital dollar, pointing to a section of the report that seemed to herald the benefits of a currency controlled by the US Federal Reserve.
The industry has responded with a united front, with many executives and experts calling for a more nuanced approach to regulation that considers both the risks and benefits of cryptocurrencies.
“At Coinbase, we believe that constructive regulation of the cryptocurrency industry is necessary for its long-term success,” tweeted Coinbase CEO Brian Armstrong. “However, we must ensure that any regulations are balanced and do not stifle innovation or impede access to this transformative technology.”