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US Presidential Advisors Face Congressional Criticism for Crypto Policies in Economic Report

The lawmakers took issue with a section of the President's annual report that they saw as an affront to digital assets and a threat to the economy

Shashank Bhardwaj
Published: May 4, 2023 04:29:14 PM IST
Updated: May 5, 2023 09:54:53 AM IST

US Presidential Advisors Face Congressional Criticism for Crypto Policies in Economic ReportImage: Shutterstock

US Congressman Warren Davidson and Mike Flood have written a letter to the chair of the Council of Economic Advisers (CEA) asking for an explanation of a chapter the agency published for the Economic Report of the President that took "a hostile view of the digital asset ecosystem." In a chapter called "The Reality of Crypto Assets," which was part of a report given to Congress in March, it was said that crypto assets “have brought none of the promised benefits." Lawmakers said that the agency's view went against what was said in the President's "Executive Order on Ensuring Responsible Development of Digital Assets."

The Congressmen wrote: "We are working to do our part in Congress to put up a regulatory regime for digital assets that will allow this innovative ecosystem to thrive in the U.S. while performing critical protections." They also said that the administration's hostile attitude toward the digital asset ecosystem only pushes digital asset innovation outside of the U.S., bringing capital and economic growth to other countries at the expense of the U.S.

The letter raised questions, and many of them came to the minds of crypto supporters who disagreed with the report. The writers wanted to know how companies can follow the law "when the laws that are supposed to apply are at odds with each other, like when a product is both a security and a commodity." They also asked why the agency wrote off the role of the Congress by saying that most of what goes on in the crypto space is already covered by regulations. They also asked, "Does the CEA think that legislation from Congress won't reduce potential risks and give consumers more protections than they have now?"

Finally, the lawmakers want to know why the agency, part of the President's Executive Office, asserted that the soon-to-launch FedNow rapid payment system and central bank digital money would be easier and more effective than digital assets in modernizing the financial system. 

The letter failed to state why this information was being sought. The authors have specified the due date for responses as May 26.

Davidson is a longtime crypto advocate, and in April, he filed a bill to oust Gary Gensler as chairman of the Securities and Exchange Commission.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash