Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, has expressed strong reservations about the utility of cryptocurrencies, as markets closely followed his comments for insights on monetary policy directives. As a voting member on interest rates this year, his statements extended the central bank’s continued skepticism towards digital currencies. Meanwhile, Bitcoin fell slightly, trading below $66,000 as U.S. stock markets opened lower.
What Are the Fed’s Views on Cryptocurrencies?
Kashkari’s remarks stand in stark contrast to the previously cautious tone of the Federal Reserve regarding digital currencies. Earlier comments from the Fed often opted for ambiguity; however, Kashkari was forthright, dismissing cryptocurrencies as “completely useless.” His assertive tone indicates mounting exasperation with the ongoing discussion around crypto assets both publicly and politically.
Is the U.S. Labor Market Still Thriving?
Affirmatively, Kashkari observed that the U.S. labor market remains remarkably strong with only minor signs of weakening. He emphasized that the central bank is close to fulfilling its dual mandate—maintaining inflation control and fostering employment. His remarks suggest that the Fed remains alert as it contemplates future policy shifts while recognizing robust employment trends.
Kashkari also noted prolonged housing shortages in the U.S., attributing the issue to a mix of high zoning costs, rising material prices, and increased labor expenses rather than merely interest rates.
On artificial intelligence, Kashkari expressed measured optimism about its future. He foresees AI’s potential to substantially elevate productivity within the next decade, though he emphasized the Fed’s careful methodology in internal AI integration, prioritizing the safeguarding of confidential information.
“I’m optimistic about artificial intelligence. Just about every business is seeing its advantages, and AI could drive substantial productivity gains in the next five to ten years,” Kashkari commented. “Within the Fed, we are taking a prudent approach, especially when it comes to limiting access to confidential information.”
In his sharp critique of cryptocurrencies, Kashkari further questioned the practical benefits of stablecoins, positing that their advantages over existing digital payment solutions, like Venmo, remain unclear.
“When it comes to crypto, I think it’s totally useless,” Kashkari continued. “As for stablecoins, it’s not clear what they can do that current payment apps like Venmo don’t already enable.”
– Bitcoin drifted toward $65,000, reaching a daily low influenced by both Kashkari’s remarks and broader market trends.
Kashkari’s candid criticism of cryptocurrencies coincided with Bitcoin’s downtrend, amplifying alerts about its potential slide to $50,000 if the downward momentum strengthens. The intersection of U.S. stock activities and his statements urged investors to remain vigilant in a volatile financial landscape.
