The recently published US Economic Report of the President is skeptical about the potential benefits of cryptocurrencies. The report acknowledges the potential benefits of distributed ledger technology, but it mainly focuses on the risks associated with crypto assets.
The report takes a similar view to Warren Buffett, who famously stated that he wouldn’t buy all the Bitcoin in the world for $25 because it “doesn’t produce anything.” The report highlights the lack of integration of crypto assets with the rest of the financial system as a reason for the lack of systemic crisis caused by them.
Crypto assets pose significant risks
According to the report, crypto assets pose significant risks to financial stability, consumer and investor protection, privacy, and law enforcement. The report emphasizes the high volatility of crypto assets and their lack of intrinsic value. It also notes the prevalence of fraud and illicit activities associated with crypto assets.
Also Read: U.S. regulators warned banks about crypto fraud and scam
The report acknowledges the need for appropriate regulatory action to address the risks posed by crypto assets. It calls for regulatory agencies to coordinate and collaborate to ensure a consistent approach to regulation. The report also notes the need to prevent the use of crypto assets for illicit purposes and to ensure that consumer and investor protection is maintained.
The report does not provide much encouragement for those in the crypto industry hoping for a more supportive regulatory environment. It highlights the risks associated with crypto assets and calls for policymakers to act appropriately to address these risks. Despite acknowledging the potential benefits of distributed ledger technology, the report is overall skeptical about the role of crypto assets in the financial system.
