Cryptocurrencies Fail to Deliver Promised Benefits
The Economic Report notes that the benefits promised by cryptocurrencies, such as improved payment systems and increased financial inclusion, have yet to materialize. The report states, "So far, crypto assets have brought none of these benefits."
Crypto Assets Criticized as Investments
The report criticizes crypto assets as investments, asserting they don't have a fundamental value, serve as a substitute for fiat currency, increase financial inclusion, or improve payment efficiency. The report claims that crypto innovation primarily creates artificial scarcity to support asset prices.
Defi Risks and Regulatory Compliance Issues
The Economic Report highlights the serious risks that decentralized finance (DeFi) poses to investors, particularly the use of significant leverage and the performance of regulated functions without compliance with appropriate regulations. The report suggests DeFi platforms should adhere to all applicable laws and regulations.
Crypto Advocates Accused of Ignoring Economic Principles
The White House Council of Economic Advisers accuses some crypto asset supporters of being ignorant of fundamental economic principles. The report states that the design of these assets often reflects this ignorance, which can be detrimental to consumers and investors.
Emphasis on Effective Regulation in Crypto Space
The Economic Report underscores the need for effective regulation within the crypto asset space, acknowledging the potential of crypto assets and their underlying technology but asserting that there are more issues than advantages currently.
U.S. CBDC as a Safer Alternative
The report discusses the potential of a U.S. Central Bank Digital Currency (CBDC) to modernize the country's financial system without the dangers or irrational exuberance associated with crypto assets.