Minneapolis Fed President Kashkari on Crypto Market: ‘Thousands of Garbage Coins’

The Federal Reserve official who famously reassured the U.S. public last year that the central bank could inject unlimited money into the economy has voiced some well-worn, oft-rebutted criticisms of bitcoin and cryptocurrency in general. “I was more optimistic about crypto and bitcoin five or six years ago,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Tuesday. “So far what I’ve seen is … 95% fraud, hype, noise and confusion.”

During an appearance at the Pacific NorthWest Economic Region annual summit in Big Sky, Mont., Kashkari contrasted the open nature of the crypto field with the U.S. government’s monopoly on issuance of dollars. “There is no barrier to you creating your own bitcoin, or me creating my own … I’ll call it Neelcoin,” he said. Pointing to his on-stage interlocutor, Larry Simkins, CEO of conglomerate The Washington Companies, Kashkari added, “and then Larry can create Larrycoin.”

Other Fed officials have expressed more nuanced and favorable assessments of digital assets. Vice chairman Randal Quarles, for example, said in June that the U.S. should find ways to “say yes” to stablecoins. While it is true that anyone can spin up a digital asset easily, Kashkari did not mention the power of network effects, which make bitcoin more secure and valuable in the market’s eyes than its many competitors.

Kashkari scoffed at the idea that bitcoin could serve as a safe haven from inflation, particularly the kind seen in some developing countries. “I don’t see any evidence that the U.S. government or the United States of America is on a path to Venezuela,” he said. Some bitcoin users may find that line galling given Kashkari’s interview on television’s “60 Minutes” in 2020, early in the pandemic, in which he boasted that “there is no end to our ability” at the Fed to pump money into the economy.

Minneapolis Fed President Kashkari on Crypto Market: ‘Thousands of Garbage Coins’, CoinDesk, Aug 18