Minneapolis Fed’s Neel Kashkari Sees No Use Case for Bitcoin

Neel Kashkari, the Minneapolis Federal Reserve president, has a history of making poisonous remarks about crypto. Yesterday’s comments show that his stance hasn’t changed.

Speaking at an event in Montana on Tuesday, Kashkari admitted that he was “more optimistic about Bitcoin five or six years ago.” These days, however, what he claims to have seen in crypto “is 95% fraud, hype, noise and confusion.”

Bitcoin is often seen as a hedge against inflation and a way to opt out of the traditional fiat institutional system that, as many crypto proponents claim, is too oppressive, corrupt, and outdated.

Bitcoin no match for greenback

However, Kashkari reckons that the U.S. dollar is more valuable than Bitcoin because the government has a monopoly on printing the money.

“If you go into your basement and you want to produce your own currency, the Secret Service will come knocking on your door. There’s no barrier to you creating your own Bitcoin [and] there are thousands of garbage coins that are being created,” said Kashkari.

He added that some of those coins “are complete fraud and Ponzi schemes” that lure investors only for the projects’ founders to rip them off.

Kashkari said that he did try to understand what problems Bitcoin and other cryptocurrencies are trying to solve, but “no one can articulate what the actual problem is.”

“Some people say we don’t want to be another Venezuela, and that’s ok, I don’t want us to be another Venezuela either. [But] I haven’t seen any use case that Bitcoin solves other than funding illicit activities like drugs and prostitution,” concluded Kashkari.

This is not the first time that the Minneapolis Federal Reserve president has slammed Bitcoin.

In February 2020, he labeled crypto “a giant garbage dumpster” that robbed people for tens of billions of dollars, while praising the U.S financial watchdogs such as the Securities and Exchange Commission (SEC) for “getting involved in cracking down on this.”