The White House went after cryptocurrencies in its annual economic report, calling digital assets speculative, with no economic benefit, and a risk to financial markets and investors. That tone should come as no surprise.
US lawmakers and regulators have taken an increasingly hard look at cryptocurrencies over the past year. A sell-off in Bitcoin prices and a series of business failures across the sector sparked scrutiny that has only accelerated since crypto exchange FTX collapsed last November amid allegations of fraud.
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The White House went after cryptocurrencies in its annual economic report, calling digital assets speculative, with no economic benefit, and a risk to financial markets and investors. That tone should come as no surprise.
US lawmakers and regulators have taken an increasingly hard look at cryptocurrencies over the past year. A sell-off in Bitcoin prices and a series of business failures across the sector sparked scrutiny that has only accelerated since crypto exchange FTX collapsed last November amid allegations of fraud.
Joe Biden’s White House, which has proposed a series of measures that would rein in the industry, doubled down on scrutiny in the annual economic report to the president, published Monday. The report devotes a chapter to digital assets, “debunking” claims about crypto and detailing arguments against its widespread use.
Crypto is mostly a speculative investment, the report said, and the prospects for cryptos as currencies are limited because they don’t perform the functions of money as well as the dollar. Stablecoins are also far from stable, says the report, which cites the meltdown of stablecoin Terra last spring, which led to a decline in the digital asset landscape. Crypto-assets could also be harmful to consumers and investors, the White House argued, saying the overall economic benefits from blockchain technology have been limited.
The criticism confirms expectations that US regulators will take a tougher stance on the crypto industry.
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But with Bitcoin possibly heading for another bull run – with the market value of the digital asset up $1.2 trillion from under $800 billion at the start of 2023, outperforming
Dow Jones Industrial Average
and
S&P 500
— Supporters of crypto may not be sweating too much for now.
Write to Jack Denton at [email protected]
