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 what crypto advocates have said on the matter as “empty rhetoric” and claimed there is no real use case.
During the panel discussion, Kashkari used examples to illustrate the fundamental questions he posed to representatives of the crypto sector. Acknowledging that traditional bank transfers are expensive and slow, Kashkari countered those who claim that stablecoins solve this problem with the following scenario: “Imagine a person living in the United States sending money to a relative in the Philippines for grocery shopping. Traditional methods are expensive and time-consuming. But with stablecoins, the money can reach Manila instantly.”
But Kashkari continues that this explanation is insufficient: “Well, you still have to convert into the local currency. Then market players say they are also using stablecoins. This is essentially saying the whole world should use the same currency, or all this friction should disappear, and that’s not going to happen.”
Kashkari claimed to have asked the most basic questions about cryptocurrencies and stablecoins. “Other than drugs and illegal things, what are some use cases that would actually be useful for consumers?” He described the answers he received as “a salad of words” and said: “There’s nothing there, just nonsense.”
Kashkari’s views reflect the Fed’s skepticism toward digital assets. Kashkari has previously made similar criticisms, calling cryptocurrencies “totally useless” and “tools for speculation.”
*This is not investment advice.
