Council of Economic Advisers' Report Draws Industry Criticism

• A 478-page Economic Report of the President analyzing the risks and opportunities of digital assets.
• Industry critiques centering on the report's negative tone and focus on risks.

On March 2023, the Council of Economic Advisers released a comprehensive 478-page report analyzing the risks and opportunities of digital assets. This document discusses the existing financial sector landscape rather than outlining specific regulatory recommendations.

The report’s analysis centers on the existing classification system, which delineates securities from commodities within the cryptocurrency space. The report discusses the existing regulatory jurisdiction of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). It also describes the current oversight of cryptocurrency spot markets.

Additionally, the report discusses the risks of banks offering cryptocurrency custody and related services. It also describes the existing chartering process for institutions in this sector. At the same time, the report discusses the current tax treatment of digital assets under federal income purposes. This reflects the existing framework for compliance and taxation.

Cecilia Rouse, Chair of the Council of Economic Advisers, characterized the report as an analysis of the risks and opportunities presented by digital assets.

This drew criticism from some industry insiders. Cody Carbone, Vice President of Policy at the Chamber of Digital Commerce, referred to the report's negative tone and focus on risks as a “missed opportunity” that contributes to “unnecessary uncertainty.”