Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, questioned the practical benefits of cryptocurrencies and stablecoins in cross-border transactions during a panel discussion.
Kashkari described the statements made by crypto advocates on the subject as “empty rhetoric,” arguing that they have no real use case.
During the panel, Kashkari illustrated the fundamental questions he posed to representatives of the cryptocurrency sector with examples. Acknowledging that traditional bank transfers are expensive and slow, Kashkari countered those who claim stablecoins solve this problem with the following scenario: “Imagine someone living in the US sending money to a relative in the Philippines for grocery shopping. Traditional methods are costly and slow. But with a stablecoin, it arrives in Manila instantly, they say.”
However, Kashkari continued, stating that this explanation was insufficient: “Well, you still have to convert it to local currency. Then they say that the marketeer also uses stablecoins. This is essentially saying that the whole world should use the same currency or that all this friction should disappear, which is not going to happen.”
Kashkari argued that he asked the most fundamental question for crypto and stablecoins: “Give me a use case that actually works for consumers, besides drugs and illegal things.” He described the answers he received as “word salad,” saying, “There’s nothing there, just nonsense.”
Kashkari’s views reflect the Fed’s skeptical stance on digital assets. Having previously made similar criticisms, Kashkari has described cryptocurrencies as “completely useless” and a “tool for speculation.”
*This is not investment advice.
