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The White House Council of Economic Advisers has criticized crypto assets. In the Economic Report of the President, published on March 20, there are over 30 pages detailing the councils thoughts on crypto assets. The report noted flaws and problems related to crypto assets.

The Economic Report noted, among other things, that none of the benefits promised by cryptocurrencies have materialized. These benefits include cryptocurrencys promise to improve payment systems, increase financial inclusion, and more.

Furthermore, the Economic Report criticizes crypto assets as a form of investment. According to the report, crypto assets do not currently have a fundamental value, serve as a substitute for fiat currency, increase financial inclusion, or improve the efficiency of payments. Instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets prices, according to the report.

Then, the Economic Report points out how DeFi creates serious risks to investors. Namely, the report points to the use of significant leverage and the performance of regulated functions without compliance with appropriate regulations. According to the report, DeFi platforms that operate as unregulated banks, broker-dealers, exchanges, etc. should adhere to all applicable laws and regulations.

The White House Council of Economic Advisers accuses some supporters of crypto assets of being ignorant of fundamental economic principles in a particularly harsh statement. Although advocates often claim that digital assets, particularly crypto assets, are a revolutionary innovation, the design of these assets frequently reflects an ignorance of basic economic principles that have been learned in economics and finance over centuries.

Ultimately, the Economic Report emphasized the need for effective regulation within the crypto asset space. Although the report acknowledges some of the potential of crypto assets and the technology that underpins them, it also claims that there are currently more issues than advantages.

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Notably, the report discussed how a U.S. CBDC might modernize the countrys financial system without the dangers or irrational exuberance that come with crypto assets.

The post White House Economic Report: Cryptocurrency Falls Short of Promises appeared first on Coin Edition.

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