Neel Kashkariwho took over as president and CEO of the Federal Reserve Bank of Minneapolis on January 1, 2016, recently explained why he was unimpressed with crypto.
Last Friday (November 18, 2022), following the recent collapse of SBF’s FTX empire, Kashkari shared his final thoughts on crypto.
Commenting on a Wall Street Journal article (titled “Why the Investing Pros Were Such Suckers for FTX”) posted earlier today, he wrote:
“It is interesting but 2 narrow. This is not the case with a fraudulent company in a serious industry. The whole notion of crypto is nonsense. Not useful 4 installments. No inflation hedge. No rarity. No tax authority. Just a tool for speculation and bigger fools.“
This isn’t the first time Kashkari has come across as a crypto-skeptic.
On August 17, 2021, while speaking at the annual Pacific Northwest Economic Region (PNWER) summit held in Montana, he said he was less optimistic about Bitcoin than five or six years ago. Rather than sparking financial innovation, Kashkari said the current crypto landscape is made up of “95% fraud, hype, noise and confusion.”
Kashkari argued that Bitcoin could never surpass the US dollar as a form of currency, noting the government’s monopoly on money printing.
As reported by Decrypt, Kashkari said:
“If you walk into your basement and want to produce your own currency, the Secret Service will come knocking on your door. There is no obstacle to creating your own Bitcoin [and] there are thousands of coins that are created.“
Kashkari noted that several of the cryptoassets in the market are “complete cheats and Ponzi schemes” and take advantage of the industry’s get-rich-quick mindset.
The head of the Minneapolis Federal Reserve admitted that he tried to figure out what problems Bitcoin would be able to solve, but ultimately concluded that “nobody can articulate what the real problem is.”
He pointed to investor concerns about dollar inflation as a possible avenue for bitcoin, but countered that BTC has so far only proven effective in funding illicit activities such as drug trafficking and prostitution. .
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