The Economic Report of the President released included a round condemnation of cryptocurrencies, saying they offer nothing except risk to U.S. financial markets.
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If you're trying to find something nice that President Joe Biden's annual Economic Report of the President to Congress had to say about crypto, here it is: "It is conceivable that some of their potential benefits may be realized in the future."
Of course, that wasn't talking about cryptocurrencies or even blockchain, but rather the distributed ledger technology that blockchains are built on.
One of nine sections in a report that also looked at topics like Supply Challenges in U.S. Labor Markets and Investing in Young Children's Care and Education, the 36-page reveal of the administration's perspective on crypto basically ran from skeptical to negative to threatening.
It was summed up thusly in the introduction:
"Crypto assets to date do not appear to offer investments with any fundamental value, nor do they act as an effective alternative to fiat money, improve financial inclusion, or make payments more efficient; instead, their innovation has been mostly about creating artificial scarcity in order to support crypto assets' prices — and many of them have no fundamental value."
Buffeted by Bad Press
Looking at "The Reality of Crypto Assets," the report takes roughly the same view as Warren Buffett, who said he wouldn't buy all the Bitcoin in the world for $25 because "it doesn't produce anything."
On the risk side, the report said:
"The risks presented by crypto assets stem from excessive speculation, high leverage, run risk, environmental harm from crypto asset mining, and fraudulent activities that harm retail investors and corporations."
One interesting comment was that "there has not yet been a systemic crisis caused by crypto assets, in part because they are not yet fully integrated with the rest of the financial system, giving policymakers time to act appropriately."
Which suggests that either the Biden administration — whose regulators have been doing everything they can to chase banks away from crypto clients — accepts that the currency crisis was really caused by banks' poor risk management, or that the report was already written and likely printed by the time crypto-focused Silvergate Bank closed its doors and regulators killed crypto friendly Silicon Valley Bank and Signature Bank over the last couple of weeks.
