The White House is pushing back on crypto

The US government, in this case the White House, issues a report that paints a very bad picture of crypto assets.

Just as some judgments may seem wise, the recent White House report on the crypto world is a bucket of ice water against a sector that was valued.

The crisis in the US banking system which has persisted for 10 days now, and which knows no rest despite relevant measures taken by the Fed and the government, has sent Bitcoin and many altcoins skyrocketing.

Bitcoin and with it many crypto-assets were born precisely as an alternative to the classic financial world and, despite some mistakes at this stage, have been very attractive to investors.

The White House saw crypto-assets as a threat to the status quo of finance, and the report prepared by the Council of Economic Advisers came out with enviable timing.

White House Report on the Crypto World

According to the report, the cryptosystem shows major flaws and contains dangers for investors.

Experts, in the document, believe that there are more risks than benefits in addition to being a much less green world than it wants to appear.

The paper, which came out two days ago, is annual and highlights the financial priorities and policies of the Oval Office, and this time it featured a focus on cryptocurrencies.

There is a growing feeling in the crypto world that a new witch hunt is underway just like it did during the Inquisition period.

Legislators and the government openly deny this accusation, but tensions between the government and regulators against crypto remain.

The former deputy director of the New York Department of Financial Services, Matthew Homer, commented as follows:

“a damning indictment of space that makes their political stance crystal clear.

The amount of attention paid to digital assets is significant, especially compared to other areas of financial services which have arguably been much more damaging in recent weeks. The evaluation impresses with its definitive tone and broad brushstrokes.”

The stated goals of the crypto world and the anti-system call of some of them also came under the magnifying glass of the government task force that prepared the report.

This document explained that in addition to showing the side of great risks, cryptocurrencies lack concrete value and show errors from a technical point of view.

“It has been argued that cryptoassets can provide other benefits, such as improving payment systems, increasing financial inclusion, and creating mechanisms for the distribution of intellectual property and economic value that bypass middlemen who derive value from both the provider and the recipient.

However, looking under the hood of these arguments reveals a more complicated picture. So far, cryptocurrencies have not provided any of these benefits.”

The official document reads.

The annus horribili of 2022 contributed to the many failures of the crypto industry in supporting the government’s idea.

The company’s bankruptcies

The Terra Luna case, FTX, Three Arrows Capital, etc. have played into the speculative actions of the White House, which wants to put the whole industry in a bad light.

The trick used by Long Island Iced Tea which changed its name to Long Blockchain to capitalize on a trend and price the market is a minor example of how sneaky the crypto world is.

“Some have suggested that digital payment systems like FedNow could almost immediately reduce the need to circulate digital cash. In this case, the benefits of circulating digital cash after the launch of FedNow may be minimal.

Indeed, Federal Reserve Governor Michelle Bowman commented in August 2022 that “my expectation is that FedNow addresses the issues that some have raised about the need for a CBDC.”

However, the report acknowledges that the cryptographic system based on the idea of ​​a distributed ledger and blockchain technology could be useful for the future.

The tool is real and as the official document says:

“Some cryptoassets appear to be here to stay, but they continue to pose a risk to financial markets, investors and consumers.

Much of the activity in the cryptocurrency space is covered by existing regulations, and regulators are expanding their scope to bring a large number of new entities into compliance. Other parts of the cryptoasset space require the coordination of various agencies and considerations of how to manage the risks they pose.”