Fed's Kashkari: Crypto Useless, Stablecoins Threaten Banks
Minneapolis Federal Reserve President Neel Kashkari told a recent panel that cryptocurrency is useless for American consumers. He warned that stablecoins will pressure banks to lend less and damage the economy.
Minneapolis Federal Reserve President Neel Kashkari told a recent panel that cryptocurrency is useless for American consumers. He warned that stablecoins will pressure banks to lend less and damage the economy.
This isn't new territory for Kashkari. He publicly labeled the cryptocurrency market a farce back in 2018. But his latest comments go further, targeting stablecoins with a specific economic threat.
Kashkari said that when advocates are pushed on utility, they quickly admit crypto isn't useful in America. Instead, they pivot to international remittances. He used a personal example: his wife was born in the Philippines and her family still lives there. Crypto advocates tell him sending money to his father-in-law for groceries would be cheaper and faster than traditional methods.
But Kashkari sees a fatal flaw in that argument. The crypto advocates then suggest the grocer should also accept crypto, which means everyone in the world would need to use the same currency or payment platform for the frictions to disappear. That ignores reality, he said — countries won't abandon their own monetary policy for a global crypto standard.
Kashkari has pushed hard against bank deregulation since taking over the Minneapolis Fed in 2016. Under his leadership, the bank released an action plan called "Ending Too Big to Fail" that advocated for tighter bank regulations. His stablecoin concerns fit that pattern — he believes they'll pull deposits away from traditional banks and force them to reduce lending.
He closed with advice for anyone evaluating crypto claims: ask the most basic questions and don't settle for word salad nonsense answers. Make them really explain how this thing actually works, because whenever he does that, there's just nothing there. Minneapolis Federal Reserve President Kashkari previously worked as interim Assistant Secretary of the Treasury for Financial Stability from October 2008 to May 2009, overseeing TARP during the 2008 financial crisis.
Kini nga artikulo gisulat base sa report gikan sa U.Today.
