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Neel Kashkari, President of Federal Reserve Bank of Minneapolis, reacted over the FTX collapse and shared a tweet on his twitter account on November 11, 2022.
Fed’s Neel Kashkari: Crypto in its Entirety is “Nonsense”
Mr. Kashkari said, “This is interesting but 2 narrow. This isn’t a case of 1 fraudulent company in a serious industry. 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.”
The Federal Reserve Bank of Minneapolis is located in Minneapolis, Minnesota, in the United States. The bank covers the 9th District of the Federal Reserve and is the third largest of the 12 Federal Reserve banks.
Neel Kashkari is an American banker, economist and politician. He was named the new president of the Minneapolis Federal Reserve November 10, 2015.
The unexpected fall of FTX left many questions for crypto investors and also raised questions for their investment securities. In a conversation with WSJ’s Jason Zweig, Mr. Kashkari made his response via a tweet in which he said that it’s not just FTX: crypto in its entirety is “nonsense.”
Mr. Kashkari also said that “The recent sad developments in crypto land remind me of this paragraph (as shown in his tweet) from the Great Crash, by John Kenneth Galbraith. It should be required reading for all finance types. History seems to be repeating itself almost every decade lately.”
Minneapolis Fed President also said about the most-cited crypto adherents in four different points, he stated:
- Not useful for payments.
- No inflation hedge.
- No scarcity.
- No taxing authority.
What does Fed’s Michael Barr Said?
Additionally, The Fed’s top financial regulatory official, Michael Barr, also expressed his concern last week regarding the significant unknown risk that exists in the non-bank sector, such as the risk stemming from crypto assets.
Mr. Barr told lawmakers “Recent events in crypto markets have highlighted the risks associated with new asset classes when not accompanied by strong guardrails.” He didn’t identify any crypto firms by name.
In addition, in his written testimony, Mr. Barr said crypto-market meltdowns “remind us of the potential for systemic risk if interlinkages develop between the crypto system that exists today and the traditional financial system.”
On the other hand, nine U.S. financial institutions, including BNY Mellon, Citi, HSBC, Mastercard, PNC Bank, TD Bank, Truist, U.S. Bank, and Wells Fargo, launched a pilot program working with the Federal Reserve Bank of New York to test the feasibility of a digital dollar based on distributed ledger technology.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
