Crypto FUD in the Economic Report

In a bold move that raised eyebrows across the crypto sphere, the latest Economic Report of the President has dedicated a whopping 15% of its content to what many in the industry call ‘crypto FUD’ (fear, uncertainty, and doubt). Released on March 20, this is the first time digital assets received such rigorous scrutiny from the White House since the policy report’s inception in 1950. Fred Ehrsam, co-founder of Paradigm, minced no words in expressing discontent about this unprecedented chapter dedicated to the perceived failures of cryptocurrencies.

The Main Arguments Against Crypto

The report boldly asserts that crypto assets do not deliver on their promised benefits, such as improving payment systems and promoting financial inclusion. Instead, it claims that the innovation behind many of these assets primarily revolves around creating ‘artificial scarcity’ to prop up their prices. It starkly states, “many of them have no fundamental value.” This left crypto enthusiasts feeling as though their beloved digital currencies were being tossed aside like last year’s smartphone model.

Stablecoins Under Fire

The report also casts a wary eye toward stablecoins, suggesting they are more susceptible to run risks than once thought. This adds yet another feather to its cap of indignation aimed at crypto, as if it were a culinary critique of a poorly done souffle. According to the authors, stablecoins fail to act as a reliable ‘fast payment’ instrument—something that doesn’t sit well with the enthusiasts dreaming of a frictionless digital economy.

The Decentralization Debate

Decentralization, a core principle of the crypto ethos, was also questioned in the report. It claims that despite blockchain technology’s self-proclaimed decentralization, the reality is that a mere handful of players dominate the mining scene. In short, it’s like declaring your potluck dinner a collective effort but having only three people bring all the food. This raises eyebrows over the supposed trustlessness of blockchain technology.

The Greater Picture

Coming off the heels of the collapses of major banks that previously played nice with the crypto world, the timing of this report feels less like a coincidence and more like a scripted warning. For many crypto advocates, this Economic Report isn’t just a critique; it’s a battle cry prompting them to ask: will the Biden administration be remembered as a leader of innovation or merely a roadblock to technological progression set to redefine finance?