Cryptocurrencies under fire: US government sees no crypto future after FedNow
Cryptocurrencies pose a threat to the US financial system, according to a new White House report. Investors should beware because, according to the report, crypto assets operate outside of their intended purpose, increasing the risk of collapses and fraud attempts. The report of the White House Council of Economic Advisers includes a chapter on digital assets for the first time and brings with it a scathing verdict.
Cryptocurrencies: US government sees no future for crypto
US President Joe Biden had already commissioned regulators last year to take a closer look at the crypto industry and report on it. It is now clear that the US government has serious doubts about the usefulness of cryptocurrencies. According to the report , cryptocurrencies are described as intellectual property, a better payment mechanism, an alternative to the current financial system and assets for the abolition of financial instruments.
However, despite all these reviews, the government claims that crypto assets do not yet offer valuable investments and do not represent an alternative to fiat money. The Biden administration also warns that the development of cryptocurrencies. is creating artificial scarcity to support cryptocurrency prices. This can panic investors and the rest of the financial system. Therefore, regulations to protect investors are urgently needed.
Because of FedNow: crypto will disappear
The report also notes that the Fed will soon have a faster payment network with FedNow, a new instant payments system. Thus, the need for Cryptocurrencies would largely disappear. The Biden administration is also warning about CBDC, the central bank digital currency system. It could damage the credit structure and increase the risk of accelerated bank resolution. However, the report, which does not endorse CBDCs, leaves an open door for further research into the system.
The US government has also expressed its concerns about the DeFi sector. According to the report, this sector poses very serious risks. such as B. The use of high leverage and the absence of favorable conditions for credit transactions, which according to the law should take place. At least in the section on the crypto ecosystem in the latest report, it becomes clear that the US government continues to view the industry negatively.