- Federal Reserve’s Neel Kashkari has cast doubt on Bitcoin’s legitimacy.
- Kashkari likened Bitcoin to being a nice toy.
- Many experts emerged to challenge Kashkari’s viewpoint.
Bitcoin’s legitimacy still remains in question among US regulators and senators, with many often offering scathing critiques of the reigning crypto king. Joining the extensive list is Neel Kashkari, President and CEO of the Federal Reserve Bank of Minneapolis, who expresses concerns about its legitimacy in the modern world.
Kashkari Questions Bitcoin’s Legitimacy
In a candid discussion with Pensions & Investments Editor-in-Chief Jennifer Ablan during a LinkedIn Live event, Neel Kashkari cast doubt on Bitcoin’s value amidst the rising optimism and hype surrounding the asset.
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The head of the Minneapolis Federal Reserve Bank expressed his concerns about Bitcoin, likening it to a “consumer protection issue” due to the lack of understanding among some investors regarding their investments. Kashkari cautioned that cryptocurrencies are “so volatile that some people could be put in a lot of harm’s way.”
“There’s a lot of fraud, hype, and confusion, so I am worried from a consumer perspective,” Kashkari opined.
Kashkari Likens Bitcoin to Toys
The Fed President’s critique didn’t stop there. He compared Bitcoin to Beanie Babies, stating they have “no actual utility in the economy, other than being a nice toy that some people enjoy owning and trading.”
Kashkari didn’t hold back; he further reinforced his criticism by suggesting that Bitcoin’s primary function appears to be circumventing banking regulations or facilitating shady dealings.
“Bitcoin has been around for more than a decade, and more than a decade later, there’s still no legitimate use case in an advanced democracy.” The Fed President asserted.
Still, despite Kashkari’s blistering assessment, many community members emerged to challenge his viewpoint.
Community Members Defend Bitcoin
Several experts from the Bitcoin community swiftly rebutted Kashkari’s scathing remarks, highlighting many use cases. Alex Gladstien, Chief Strategy Officer at the Human Rights Foundation, for instance, took to X, asserting that beyond the Fed president’s apparent ignorance, Bitcoin boasts numerous legitimate applications, ranging from international remittances to micropayments.
Moreover, Bitcoin has emerged as a viable legal tender in El Salvador, where its estimated BTC reserves reportedly yielded an $85 million profit, as per NayibTracker data. El Salvador also recently introduced schemes such as offering citizenship for a $1 million investment via BTC, eliminating taxes for all IT startups, and implementing a 0% tax rate for foreign-sourced income.
On the Flipside
- Neel Kashkari was more optimistic about cryptocurrency five or six years ago. However, he has recently become more critical of Bitcoin due to investment fraud and other issues.
- Bitcoin ETFs are currently the hottest investment vehicle in the United States, surpassing Silver ETFs and closely trailing Gold ETFs.
Why This Matters
Given Neel Kashkari’s role as President and CEO of the Federal Reserve Bank of Minneapolis, his scathing remarks could influence the perceptions of traditional investors regarding Bitcoin, potentially obscuring the asset’s myriad use cases.
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