White House criticizes cryptocurrency in the annual economic report
In a recently released annual economic report to Congress, the White House expressed significant doubts about the benefits of digital assets, stating that they are creating issues for consumers and the entire U.S. financial system.
The report, which comes almost a year after President Joe Biden ordered various federal agencies to study and report on the matter, may signal a change in the Biden administration’s approach from appearing not to trust the industry to openly opposing it.
The report examined some of the claims and objectives made by the cryptocurrency industry, from the role of cryptocurrencies as investment vehicles and payment tools to the potential use of cryptocurrencies in payment infrastructure. However, it argued that “to date, digital asset investments have not served the purposes that proponents claim.”
“There is a view that digital assets could deliver other benefits, such as improving payment systems, enhancing financial inclusion, and creating mechanisms for the distribution of intellectual property and financial value that bypass intermediaries extracting value from both suppliers and recipients. However, the latter part of these arguments reveals a more complex picture. To date, digital assets have not delivered on any of these potential benefits,” the report stated.
The report listed several different cryptocurrency disasters, including the collapses of Terra, BitConnect, and FTX, as warning signs of the risks associated with digital assets.
Despite listing these concerns, the report did not delve into recommendations for future regulations or actions that Congress could take to address the highlighted risks.
The White House also criticized cryptocurrency mining, stating that it has few benefits and comes at the cost of increased energy consumption, the risk of power crises, and environmental pollution. In the conclusion of the digital asset chapter, the White House called on regulatory agencies to “apply the lessons of the past year and rely on economic principles in adjusting digital asset holdings.”
While the White House report raises concerns about digital assets, it remains to be seen how this will translate into actions by regulatory agencies and lawmakers. However, the report highlights the growing concerns about the cryptocurrency industry and the need for further scrutiny and regulation.
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