Minneapolis Fed President Neel Kashkari on Thursday attacked crypto and stablecoins, saying proponents deliver “word-salad nonsense answers” when pressed to explain how the technology actually works for cross-border payments.
The Cross-Border Attack
Kashkari used a personal example to dismantle crypto’s cross-border payment thesis.
His wife was born in the Philippines, and he asked crypto advocates how he could send money to his father-in-law in Manila to buy groceries.
“They say, oh my gosh, it’s so costly to do it today. With this gee whiz crypto stuff, you could do it instantly,” Kashkari said. “But then I still say, how does he buy groceries with it? Well, you still got to convert it to the local currency. That’s still expensive.”
When pushed further, crypto advocates pivot to claiming the grocer could also accept crypto, eliminating conversion costs.
Kashkari rejected this as circular logic requiring universal adoption.
He argued that what crypto advocates really mean is that if everyone in the world used the same currency or payment platform, these frictions would disappear—but other countries won’t abandon their own monetary policy to make that happen.
Kashkari’s advice was blunt: “When it comes to anything about crypto or stablecoins, ask the most basic questions and don’t settle for word salad nonsense answers. Make them really explain how this thing actually works. And whenever I do that, there’s just nothing there.”
The Stablecoin Warning
Kashkari expressed caution about stablecoins, arguing they would pressure the economy by reducing bank lending.
He suggested stablecoins divert deposits from traditional banks, shrinking their lending capacity and tightening credit availability.
The criticism came as Kashkari discussed monetary policy, saying the Fed is “pretty close to neutral” and near achieving its dual mandate of stable prices and full employment.However, he emphasized the job isn’t complete yet.
His comments underscore ongoing Fed skepticism toward financial innovation and crypto regulation.
While other regulators embrace crypto under the Trump administration, Kashkari represents a vocal opposition within the Fed questioning fundamental utility.
Image: Shutterstock
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