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‘Crypto FUD’ — Industry Outraged as White House Report Slams Crypto

Crypto executives have expressed dissatisfaction with the latest White House economic report, which includes an entire chapter dedicated to questioning the value of digital assets.

The Economic Report of the President, released on March 20, is the first time the White House has included a section on digital assets since the annual economic policy report was first issued in 1950.

Fred Ehrsam, co-founder of digital asset investment firm Paradigm, noted that 15% of the Economic Report was devoted to “crypto FUD.”

The report comprises 35 pages disputing the “Perceived Attraction of Crypto Assets,” as well as a brief section on the FedNow payment system and central bank digital currency (CBDCs).

The main argument of the report is that crypto assets fail to deliver on their “touted” benefits, such as improving payment systems, financial inclusion, and creating mechanisms to transfer value and intellectual property, stating that “instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices—and many of them have no fundamental value.”

It further claims that cryptocurrencies fail to fulfill the tasks of sovereign money, such as the US dollar, because crypto prices vary too much to be a stable store of value, and they cannot operate as a unit of account or medium of exchange.

The paper also criticizes stablecoins, claiming that they are prone to run risks and hence too dangerous to fulfill their role as a “rapid payment” mechanism.

The latest presidential report, according to Blockchain Association CEO Kristin Smith, is “disappointing,” demonstrating that some in the government appear “increasingly allergic” to the burgeoning crypto industry, adding, “We urge the Biden administration to consider how it will be remembered: as a leader of profound innovation or a roadblock to a global tech revolution.”

The research also emphasizes decentralization, arguing that “despite claims of being decentralized and trustless, blockchain-based apps are in practice neither.”

People gain access to crypto assets via visiting a limited number of crypto asset platforms, it claims, while a tiny group of miners performs the majority of mining in most crypto assets.

The most recent annual economic policy report was released two weeks following the failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank, all of which served sections of the cryptocurrency industry.

The disclosure comes “only days” after Operation Chokepoint 2.0, according to Dan Reecer, chief growth officer at decentralized finance (DeFi) platform Acala Network.

Crypto executives have expressed dissatisfaction with the latest White House economic report, which includes an entire chapter dedicated to questioning the value of digital assets.

The Economic Report of the President, released on March 20, is the first time the White House has included a section on digital assets since the annual economic policy report was first issued in 1950.

Fred Ehrsam, co-founder of digital asset investment firm Paradigm, noted that 15% of the Economic Report was devoted to “crypto FUD.”

The report comprises 35 pages disputing the “Perceived Attraction of Crypto Assets,” as well as a brief section on the FedNow payment system and central bank digital currency (CBDCs).

The main argument of the report is that crypto assets fail to deliver on their “touted” benefits, such as improving payment systems, financial inclusion, and creating mechanisms to transfer value and intellectual property, stating that “instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices—and many of them have no fundamental value.”

It further claims that cryptocurrencies fail to fulfill the tasks of sovereign money, such as the US dollar, because crypto prices vary too much to be a stable store of value, and they cannot operate as a unit of account or medium of exchange.

The paper also criticizes stablecoins, claiming that they are prone to run risks and hence too dangerous to fulfill their role as a “rapid payment” mechanism.

The latest presidential report, according to Blockchain Association CEO Kristin Smith, is “disappointing,” demonstrating that some in the government appear “increasingly allergic” to the burgeoning crypto industry, adding, “We urge the Biden administration to consider how it will be remembered: as a leader of profound innovation or a roadblock to a global tech revolution.”

The research also emphasizes decentralization, arguing that “despite claims of being decentralized and trustless, blockchain-based apps are in practice neither.”

People gain access to crypto assets via visiting a limited number of crypto asset platforms, it claims, while a tiny group of miners performs the majority of mining in most crypto assets.

The most recent annual economic policy report was released two weeks following the failures of Silvergate Bank, Silicon Valley Bank, and Signature Bank, all of which served sections of the cryptocurrency industry.

The disclosure comes “only days” after Operation Chokepoint 2.0, according to Dan Reecer, chief growth officer at decentralized finance (DeFi) platform Acala Network.

 

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