Federal Reserve Bank of Minneapolis President Neel Kashkari said Friday (Nov. 18) in a tweet that cryptocurrency has no use and is just a device for speculators.
His tweet came in response to a Wall Street Journal article about how investors got fooled by FTX.
“This is interesting but 2 narrow,” Kashkari said in his tweet while posting a link to the article.
“This isn’t case of 1 fraudulent company in a serious industry,” Kashkari added. “Entire notion of crypto is nonsense. Not useful 4 payments. No inflation hedge. No scarcity. No taxing authority. Just a tool of speculation & greater fools.”
Reporting on the tweet, Bloomberg said this is “one of the most forceful denunciations” of crypto by a Fed official.
The report added that other Fed officials have spoken of crypto, warning about its risks and calling for regulation, with one voicing concern that the failure of one crypto entity could cause problems elsewhere, and another telling Congress that there is a need for legislation.
For example, on Monday (Nov. 14), in an interview with Bloomberg, Federal Reserve Vice Chair Lael Brainard reiterated her view that the crypto market should be regulated like traditional finance, with “strong regulatory guardrails.”
On Sept. 7, Federal Reserve Vice Chair for Supervision Michael Barr hinted at tougher oversight for cryptocurrency.
During his first speech in that role, Barr called for further examinations of the crypto industry’s risks and said he planned to coordinate with other bank regulatory agencies to ensure that “crypto activity inside banks is well regulated, based on the principle of ‘same risk, same activity, same regulation,’ regardless of the technology used for the activity.
“Crypto asset-related activity, both outside and inside supervised banks, requires oversight so that people are fully aware of the risks they face,” Barr said at the time.
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