White House Harshly Criticizes Crypto in Official Document
The Biden administration included digital assets in its annual economic report and claimed that cryptocurrencies “do not have a fundamental value.” The crypto community accuses the government of hindering the “global tech revolution.”
The White House included digital assets in its annual economic report for the first time ever. An entire chapter in the document is devoted to the questionable benefits of cryptocurrencies.
The section on digital assets in the report is titled “The Perceived Appeal of Crypto-Assets” and contains 35 pages of various claims that cryptocurrencies “do not have fundamental value.” For example, Joe Biden’s administration claims that:
- Crypto-assets fail to realize their “touted” benefits.
- Cryptocurrencies don’t serve as sovereign money because their prices fluctuate too much.
- Cryptocurrencies can’t be a stable means of savings.
- Cryptocurrencies can’t function as a unit of account or medium of exchange.
- Cryptocurrencies are too risky to be used as a “fast payment” tool.
- Decentralization of blockchain-based apps isn’t reliable in practice.
The report also states that digital assets fail to improve payment systems, financial inclusion, and mechanisms for transferring value and intellectual property.
According to Fred Ehrsam, Co-Founder of the investment firm Paradigm, such scathing criticism of cryptocurrencies by the White House is primarily aimed at spreading the FUD effect on the crypto market in the United States. Kristin Smith, CEO of the Blockchain Association, called the government report “disappointing,” accusing authorities of impeding a “global tech revolution.”
Dan Reecer, Director of the DeFi platform Acala Network, highlighted the fact that the government report came out “just days” after U.S. authorities shut down several crypto-friendly banks. He also pointed out that the White House criticism only applied to cryptocurrencies. Though the information in the section on the FedNow payment system and central bank digital currency (CBDC) was neutral, yet, according to Reecer, it clearly aimed to advertise the benefits of the currency controlled by the U.S. authorities.
Recall that the U.S. crypto community accuses authorities of a “crackdown against the crypto industry,” claiming that Silvergate Bank, Silicon Valley Bank, and Signature Bank were shut down as part of a “show of force” and without any legitimate reason. Rumors were also circulating that the Biden administration was thus planning to “reset” the banking system with the CBDC.