US President’s Economic Report 2023: Chapter 8, “Digital Assets: Learning Economic Principles Again”

03/22/2023 08:56 • NFT Newsflash • 143 views

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.”.

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

Introduction

In 2023, the US President’s Economic Report was released, with a total of 9 chapters. In Chapter 8, titled “Digital Assets: Learning Economic Principles Again,” the potential advantages and drawbacks of cryptocurrencies were discussed.

The Benefits of Cryptocurrencies

The advantages of cryptocurrencies were first introduced in Chapter 8. These advantages include improvements in payment systems, enhancing financial inclusiveness, and creating a mechanism for allocating intellectual property and financial value.

The Drawbacks of Cryptocurrencies

However, the report also pointed out that cryptocurrencies do not bring any relevant benefits. Cryptocurrencies are mainly speculative investment tools, and they generally cannot effectively play all the functions of sovereign currencies like the United States dollar. Furthermore, stable currencies may be affected by operational risks, and crypto assets may cause losses to consumers and investors. The chapter also discussed the risks associated with distributed ledger technology (DLT), such as financial innovation risks and leverage risks. Additionally, price fluctuations, illegal financial risks, and the use of extortion software were identified as other risks.

Improvements to US Payments

In addition to discussing crypto assets, Chapter 8 also mentioned the upcoming improvements to US payments. These improvements include faster payment systems and the introduction of central bank digital currencies (CBDC).

Conclusion

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.”

FAQ

Q: What are the advantages of cryptocurrencies?

A: Cryptocurrencies have the potential to improve payment systems, enhance financial inclusiveness, and create a mechanism for allocating intellectual property and financial value.

Q: What are the drawbacks of cryptocurrencies?

A: Cryptocurrencies are mainly speculative investment tools that generally cannot effectively play all of the functions of sovereign currencies. Furthermore, they may cause losses to consumers and investors, and there are risks associated with distributed ledger technology, such as leverage risks and financial innovation risks.

Q: What are the upcoming improvements to US payments?

A: The US is working on improvements to payment systems, including faster payment systems and the introduction of central bank digital currencies.

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