Crypto Debunked by US : I read US President Economic Report 2023 so that you don't have to .

Link to the report : https://www.whitehouse.gov/wp-content/uploads/2023/03/ERP-2023.pdf

Its 513 pages long report but i will go over the crypto specific with dedicated chapters.

Chapter 8: Digital Assets: Relearning Economic Principles

This chapter begins with how multiple financial cries had happened in the US but it seem to suggest that most of them are being caused by unregulated bank-like functioned entities namely trust funds. They claimed those crisis have lead to the creation of FED which control creation of dollar bill manufacturing annd monetary policies. They suggest that previous crisis namely 1907 and so on (we all know its 2008), had lead to the creation of decentralized financial system.

The Perceived Appeal of Crypto Assets

(They listed the appeal of crypto assets here and debunked these with next section)

Claim: Crypto Assets Could Be Investment Vehicles (They suggest by hoping for profit or hedge against inflation in the future, crypto could be investment vehicles just like stocks and bonds)

Claim: Cryptocurrencies Could Offer Money-like Functions without Relying on a Single Authority (They described how censorship-resistant financial system is built with the aim of decentralized entity with decentralized contribution to issue representation of value to replace centralized financial system)

Claim: Crypto Assets Could Enable Fast Digital Payments (They described how the usage of cash notes has been declining and digital payments are in demand and widely used. They said crypto industry claimed that stable coins could be used as faster digital payments due to their peg to US Dollar. )

Claim: Crypto Assets Could Increase Financial Inclusion (They said crypto industry claimed that they can bank the unbank giving crypto has no overdraft or minimum deposit to get started and suggested with a report finding that minority households are more likely to be invested in crypto).

Claim: Crypto Assets Could Improve the United States’ Current Financial Technology Infrastructure (They said that crypto industry claimed that by using DLT and smart contracts technologies, US could improve its current technology infrastructure )

The Reality of Crypto Assets

(This is where they counter or argue above facts).

Crypto Assets Are Mostly Speculative Investment Vehicles (They suggest that crypto are very volatile and suitable for short-term trading, and the volatility is because crypto has no fundamental values unlike stocks. They said bitcoin aimed to function as inflation hedge but as inflation rises, bitcoin prices has collapsed thus further proving that they are speculative, volatile and has no fundamental value).

Cryptocurrencies Generally Do Not Perform All the Functions of Money as Effectively as Sovereign Money, such as the U.S. Dollar (They explained the functions of money which are _ unit of account, medium of exchange, and store of value. They claimed even though cryptocurrencies perform those above functions, its only in limited ways.They claimed that crypto functions are not _ effective unit of account, effective medium of exchange, and effective store of value.)

** They sneak in the section of crypto mining and how it is risking the environment. Touche.

Stablecoins Can Be Subject to Run Risk (They claimed how much risk to being run in stable coins here but strangely support DLT technology and suggest that it could be use as a effective technology for payment or settlement system)

Crypto Assets Can Be Harmful to Consumers and Investors (They said how crypto industry is un-regulated , not investor protected and basically operating in unlawful manners. They said the entities has basically scammed a lot of users. They mentioned that they could be conflict of interest of crypto-platforms as most of the platforms offer exchage, broker, market making and clearing agency function.They said these integration of services are not allowed in tradtional financial system due to them leading to cosumer risks. They detailed the whole of how FTX has scammed the users )

There Have Been Limited Economic Benefits from DLT Technology (They discussed how DLT is being viewed as novel , they are not suitable for every applications. They described how prominent programmers / developers has shown their unlikeness in DLT being used in applications. They suggest that alternatives to DLT in monetary applications are far better. They suggest that DLT based Blockchains are relying on Miners which are harming the environment. They claimed that blockchain does not remove the trust layer but simply shifting the trust layer from person / organization to technology along with the features and bugs. Due to uselessness for application , web3 is shifting to some sort of centralization but in disguise of blockchain technolgy due to east of control . as they quote "once a distributed ecosystem centralizes around a platform for convenience, it becomes the worst of both worlds: centralized control, but still distributed enough to become mired in time". )

Other Risks from Crypto Assets (They stated that leverage, and ransomware and price volatility are other risks of crypto assets with details of ransomware being paid with crypto alongside with ransomware lists by countries and the cost of ransomware in 2020. )

** Here comes no surprises **

Investing in the Nation’s Digital Financial Infrastructure (They highlighted the use cases and details of The FedNow Instant Payment System and CBDC summarized with the quote of "According to these objectives, the “U.S. CBDC system, if implemented, should protect consumers, promote economic growth, improve payment systems, provide interoperability with other platforms, advance financial inclusion, protect national security, respect human rights, and align with democratic values.”")