The White House on Monday released a 513-page annual report that highlighted the various risks and negatives associated with digital assets and cryptocurrencies such as Bitcoin BTC/USD and Ethereum ETH/USD.
What Happened: President Joe Biden’s 2023 Economic Report, issued along with a yearly update by the Council of Economic Advisers, made its reference to digital assets, stating that "blockchain technology has fueled the rise of financially innovative digital assets that have proven to be highly volatile and subject to fraud."
"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," the report noted. "This inadequate design is often detrimental to consumers and investors."
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Why It Matters: The report adds that while it has been argued that crypto assets may provide other benefits, such as improving payment systems, increasing financial inclusion, and creating mechanisms for the distribution of intellectual property and financial value that bypass intermediaries, “crypto assets have brought none of these benefits."
According to the report, crypto assets, to date, appear to offer no tangible investment opportunities; they are not an effective substitute for fiat money, nor does their presence improve financial inclusion nor make payments more efficient. "Instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets’ prices. Many of them have no fundamental value.”
"One of the principal areas where there is mass noncompliance is disclosure surrounding crypto assets that are securities," the report states. This lack of disclosure prevents investors from recognizing that most crypto assets have no fundamental value.
Price Action: At the time of writing, BTC was trading at $28,288, up 1.19% in the last 24 hours, according to Benzinga Pro.
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