US Govt Attacks Bitcoin In New Report, Promotes A CBDC

The US government has released a new report attacking Bitcoin and promoting a Central Bank Digital Currency (CBDC). The report highlights concerns over the potential use of cryptocurrency in criminal activities and suggests that a CBDC would offer greater control and regulation. This stance represents a shift in the government’s attitudes towards digital currency, and marks a significant milestone in the ongoing debate over the future of money. With the global economy in a state of flux, the role of digital currencies in the financial landscape is becoming increasingly important, and this report is likely to be followed by further discussions and actions in this area.

The White House’s Economic Report has been released, and Bitcoin is at the forefront of it. The report mentions Bitcoin 75 times, attempting to discredit it and promote a Central Bank Digital Currency (CBDC) of the United States as a better solution. The section titled “The Perceived Appeal of Crypto Assets” spends many pages describing how Bitcoin works before denying it the function of money by definition. BTC reportedly fails to fulfill two out of three characteristics of money, according to the report. It cites that Bitcoin doesn’t meet the criteria of a unit of account because the values of goods and services are not denominated in BTC. The report also denies BTC the characteristic of a store of value due to its “significant volatility.”

In contrast, the report states that CBDC represents an opportunity to introduce a digital form of money that can be aligned with human rights, democratic values, and privacy. Dave Birnbaum, Director of Products at Coinbits, expressed his disagreement with this position, stating that the report’s arguments sum up the banking panic of 1907. He goes on to discuss that the section on cryptocurrencies can be seen as a “micro-aggression, implying that those who think digital assets are appealing are party to something like a Marxian false consciousness.”

As one would expect, the White House has also attacked Bitcoin mining as an energy-guzzling monster in the report. The report references a 2022 University of Cambridge study that claims Bitcoin mining consumed more energy in 2021 than several entire countries, including Finland, Belgium, and Chile. The report claims further environmental damage such as noise, air, and water pollution. The accusations appear flimsy, given the massive devaluation of the USD against Bitcoin, record high inflation, and the US banking crisis, to name a few.

For Bitcoiners, the report should be taken with a grain of salt. The value of Bitcoin protects individuals from the abuse of authority, monetary or otherwise. At the time of writing, the BTC price stood at $28,103, driven by the US banking crisis and the renewed monetary stimulus by the Federal Reserve. The report is likely to have little impact on Bitcoin adoption, but only time will tell.

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