2023 US Presidential Economic Report: Cryptographic assets are too risky to be used as a payment tool or to expand financial inclusion

According to reports, in 2023, the US President’s Economic Report was released, with a total of 9 chapters. Chapter 8, “Digital Assets: Learning Economic Principles Again,” first introduces the potential advantages of cryptocurrencies, including improving payment systems, enhancing financial inclusiveness, and creating a mechanism for allocating intellectual property and financial value; Subsequently, it was pointed out that crypto assets did not bring any relevant benefits, pointing out that crypto assets are mainly speculative investment tools, cryptocurrencies generally cannot effectively play all the functions of currencies like sovereign currencies (such as the United States dollar), stable currencies may be affected by operational risks, crypto assets may cause losses to consumers and investors, and the economic benefits of distributed ledger technology (DLT) are limited Financial innovation risks, as well as other risks such as leverage risks, price fluctuations, illegal financial risks, and the use of extortion software. In addition, this chapter also discusses the upcoming improvements to US payments and the introduction of CBDC. The chapter concludes that “crypto assets are too risky to serve as payment instruments or expand financial inclusion, and they appear to continue to exist, posing risks to financial markets, investors, and consumers.”.

Interpretation of this information:

The US President’s Economic Report for 2023 has recently been released, and it features a total of 9 chapters. Chapter 8 of the report, titled “Digital Assets: Learning Economic Principles Again,” delves into the potential advantages of cryptocurrencies. These include improving payment systems, enhancing financial inclusiveness, and creating a mechanism for allocating intellectual property and financial value. However, the report views crypto assets as mainly speculative investment tools and argues that cryptocurrencies generally cannot effectively perform all the functions of sovereign currencies, such as the US dollar. Additionally, stable currencies may be prone to operational risks, and crypto assets may cause losses to consumers and investors. Other risks discussed in the report include financial innovation risks, leverage risks, price fluctuations, illegal financial risks, and the use of extortion software. Despite acknowledging the benefits of distributed ledger technology (DLT), the report asserts that its economic benefits are limited due to the aforementioned risks. The chapter concludes that “crypto assets are too risky to serve as payment instruments or expand financial inclusion, and they appear to continue to exist, posing risks to financial markets, investors, and consumers.”