White House attacks cryptocurrencies in new economic report
CriptoFácil – After the second largest bank failure in US history, President Joe Biden released his annual economic report addressing concerns about the financial system, but instead of talking about banks, the US president attacked the ecosystem.
The document, prepared by the White House Council of Economic Advisers, questions “the benefits advocates attribute to digital assets.” It concludes that many aspects of the cryptocurrency ecosystem pose problems for users, the financial system and the environment.
In this regard, the Biden administration claims that the “advertised” benefits of digital assets have not materialized. According to the authors, cryptocurrencies, so far, do not offer investments with any fundamental value, nor do they act as an effective alternative to fiat money, nor do they improve financial inclusion, nor do they function as an efficient payment system.
“Instead, most of their innovations have focused on creating artificial scarcity to support cryptocurrency prices, and many of them lack fundamental value,” the economic advisers note.
The White House adds that, “in addition to being generally speculative assets, cryptocurrencies are currently not effective alternatives to sovereign money such as the US dollar.”
It also argues that cryptocurrencies do not work well as a medium of exchange due to their limited acceptance and high volatility, which prevents them from being reliable stores of value.
Bitcoin
In its annual economic report, the White House points to the Bitcoin ecosystem, stating that cryptocurrencies pose a high risk to the traditional financial system.
He adds that “the riskier an asset is, the less likely it is to effectively serve as money”.
The report places the US dollar in the status of a sovereign currency, “which can easily meet monetary demands”, and adds that “the main reason for this is the fact that it is backed by a reliable institution: the Central Bank”.
What is not taken into account in the economic report is that Bitcoin and the dollar are following opposite trends. That’s because, while the US currency devalues over time, the pioneer of cryptocurrencies is constantly appreciating.
For Biden’s economic advisers, “advocates of digital assets now aspire to create a decentralized financial system, without dependence on governments”.
However, he points out that cryptocurrency advocates will not be able to do this in the US and will not be able to eliminate the government anywhere in the world.
By CriptoFacil