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. Kashkari used a personal example to dismantle crypto’s potential use case, stating that when he asked crypto advocates to explain how the technology would facilitate cross-border payments, they provided vague and unclear responses.
The criticism from Kashkari is significant, given the growing interest in crypto and stablecoins as potential alternatives to traditional payment systems. The Federal Reserve has been closely monitoring the development of crypto and stablecoins, with some officials expressing concerns about their potential impact on financial stability. Kashkari’s comments suggest that the Fed remains skeptical about the benefits of crypto and stablecoins, particularly when it comes to cross-border payments.
Kashkari’s attack on crypto comes as the price of $BTC continues to fluctuate, with some investors hoping that the technology will eventually become a widely accepted form of payment. However, Kashkari’s comments suggest that the Fed is not convinced that crypto has a clear use case, at least not yet. The Minneapolis Fed president’s comments also come as other central banks around the world are exploring the potential of central bank digital currencies (CBDCs) to facilitate cross-border payments.
The use of crypto and stablecoins for cross-border payments has been a key selling point for proponents of the technology. However, Kashkari’s comments suggest that the benefits of crypto and stablecoins in this area may be overstated. The following table highlights some key metrics related to cross-border payments:
| Payment Method | Transaction Time | Transaction Cost |
|---|---|---|
| Traditional Banking | 2-5 days | 2-5% |
| Crypto and Stablecoins | near-instant | 0.1-1% |
While crypto and stablecoins may offer faster and cheaper transaction times, Kashkari’s comments suggest that the technology still has a long way to go in terms of explaining its use case.
Looking ahead, Kashkari’s comments are likely to have implications for the development of crypto and stablecoins. If the Fed and other central banks remain skeptical about the benefits of crypto, it could limit the technology’s potential for widespread adoption. As the crypto market continues to evolve, it will be important to watch how regulators and investors respond to Kashkari’s comments.
⚡ Why it matters: The Fed’s skepticism about crypto and stablecoins could limit their potential for widespread adoption, and Kashkari’s comments highlight the need for clearer explanations of the technology’s use case.
📊 By the numbers:
2-5 days: traditional banking transaction time
0.1-1%: crypto and stablecoins transaction cost
$1.5 trillion: estimated daily cross-border payment volume
🔗 Source: [Original source]*
