Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis, has reiterated his critical stance on cryptocurrency, asserting that it is “basically useless.” This latest comment aligns with his long-standing skepticism towards the sector, which he has previously branded as a “giant garbage dumpster” and described as “95% fraud, hype, noise and confusion.”
His critiques date back several years, with significant remarks dating back to 2018 when he referred to the cryptocurrency market as a “farce.” Kashkari has consistently emphasized that the industry has yet to provide a legitimate use case for advanced economies. In 2020, he praised the Securities and Exchange Commission (SEC) for its regulatory actions, claiming the measures were necessary to protect investors from losing “tens of billions of dollars.”
Kashkari”s notable dismissal of the sector came during the Pacific Northwest Economic Regional summit in August 2021, where he asserted that a vast majority of the industry was filled with fraudulent activity and misinformation. Following the market downturn in 2022, he maintained his position, suggesting that the collapse was beneficial, as it could prevent more extensive losses for investors in the future.
In a recent statement from October 2024, he highlighted the meager transaction volume in cryptocurrency, stating, “Very few transactions are actually happening on crypto… unless people are buying drugs or other illegal activities.” This assertion underscores his belief that the primary use cases for cryptocurrencies are not aligned with legitimate economic activities.
The ongoing debate surrounding cryptocurrency”s value proposition continues to be a hot topic in both financial and regulatory circles. With prominent figures like Kashkari vocalizing their skepticism, the industry faces significant challenges in shifting public perception and demonstrating practical applications that extend beyond speculative trading.
As the cryptocurrency landscape evolves, stakeholders will need to address these critiques head-on, focusing on building credible use cases that can withstand scrutiny and contribute positively to the broader economy.
