Minneapolis Fed President Kashkari called Bitcoin (BTC) and other cryptocurrencies “thousands of garbage coins”

Wed 18 Aug 2021 ▪ 11h14 ▪ 3 min de lecture - par Mary Anderson

The head of the US Central Bank stated that he can’t think anything cryptocurrency could be used for, except to finance illegal activities – drug trafficking and prostitution.

The Fed President considers cryptocurrency a fraud

The President of the Federal Reserve System (FRS), Neel Kashkari, once again expressed his dismissive attitude towards Bitcoin and digital assets in general after claiming last year that the central bank can pour an unlimited amount of money into the economy.

According to FXStreet, on Tuesday, at the annual summit of the Pacific Northwest Economic Region, Neil Kashkari said that five or six years before his attitude to Bitcoins and other cryptocurrencies was more optimistic, but now he believes that everything related to virtual assets is 95% fraud, hype, noise and confusion.

Later the Fed head said that the creation of a digital currency is available to everyone, so he may as well create his own Bitcoin and call it Neelcoin. Then he pointed to his on-stage interlocutor, the CEO of the conglomerate The Washington Companies, Larry Simkins, and added that Larry could launch Larrycoin too.

Indeed, anyone can create their own cryptocurrency but it’s the power of network effects that makes a digital asset more valuable on the market among thousands of competitors and provides its security.

Other Fed officials were not so harsh on crypto assets. For example, at the beginning of the summer, vice-chairman Randal Quarles said that the United States should find a way to “say yes” to stablecoins.

Kashkari ridiculed the potential of digital assets

Kashkari expanded on the creation of a huge number of “garbage coins”. “Some of them are complete fraud Ponzi schemes. They dupe people into investing money and then the founders rip them off,” he said. Then, he ridiculed the idea that bitcoin protect the country from inflation, particularly the one observed in developing countries.

Concluding his speech, the Fed president returned to the question of one of the listeners about the recent hype around the cryptocurrency in Miami. “If you want to launch Montana Coin, don’t let me stop you,” Kashkari joked.

Many investors and Bitcoin users were outraged by Kashkari’s dismissive attitude. Even though there are indeed cases of fraud and usage of cryptocurrencies for illicit activities, it is a sweeping generalisation to state that it is their only use. 

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Mary Anderson

I am sure that crypto assets are a new type of economy. We are at the origins of the crypto revolution. Right now, it is worth studying what cryptocurrencies and the blockchain are in order to make the most of this knowledge and these skills in the future.

DISCLAIMER

Les propos et opinions exprimés dans cet article n'engagent que leur auteur, et ne doivent pas être considérés comme des conseils en investissement. Effectuez vos propres recherches avant toute décision d'investissement.

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