The Battle Between Federal Reserve Presidents and Cryptocurrency

The Battle Between Federal Reserve Presidents and Cryptocurrency

The President of Minneapolis Federal Reserve, Neel Kashkari has said the most horrid things about the cryptocurrency industry. Using words such as ‘unregulated chaos’ and ‘escalating fraud’ which had got the audience at Bay College in Michigan thinking about the negativity of cryptocurrency.

Neel Tushar Kashkari is an Indian American banker and politician who is the President of the Federal Reserve Bank of Minneapolis. He has vast experience in the financial programs of the USA which include being the Assitant Secretary of the Treasury for Financial Stability.

He even tried running for the Governor of California in the 2014 elections but was unsuccessful. This loss is now much to the delight of cryptocurrency enthusiasts who have witnessed a bunch of horrific statements about their beloved cryptocurrency.

Kashkari was mostly against the crypto ecosystem due to the number of scams being released.

“It’s a clever idea that some people came up with, but now it’s being taken to ridiculous extremes. A barrier to entry to creating a new cryptocurrency is zero.” Kashkari said.

He added quite angrily, “If you can dupe enough people to buy it, you can pretend that you’ve launched something. And you can say, ‘Look, I’m a billionaire because I sold you one. And I own the other 999 million of them, so that means I’m a billionaire! So it has become a farce…I’m seeing more noise and more fraud than I’m seeing anything useful.”

At the beginning of 2018, Kashkari dissed Bitcoin, linking it to no credibility compared to fiat money.

“I don’t see bitcoin as a credible competitor to the dollar in the United States of America, and the reason is the barrier of entry to you creating your own coin and me creating my own virtual currency is zero,” he said back in January 2018.

However, Kashkari believes wholeheartedly in Blockchain technology as it has game-changing properties.

He clarified his support for blockchain in May 2017, “Blockchain and the underlying technology is probably more interesting and has more potential than maybe bitcoin does by itself.”

It’s not surprising that many Federal Reserve Bank members despise cryptocurrency, given their jobs have a lot to do with fiat currencies.

For example, John Williams, the president of the Federal Reserve Bank of New York, said “Cryptocurrency doesn’t pass the basic test of what a currency should be,” Williams said in April 2018. “[Currency is] basically something with a store of value [and bitcoin is not that].”

However, the central leader, U.S Federal Reserve Chairman Jerome Powell urged caution but is not such a strong skeptic compared to his juniors, Kashkari and Williams.

Powell said in November 2017, “We generally look at some of the risks of cryptocurrencies associated with money-laundering and those sorts of issues, but we’re not broadly opposed or supportive of alternative currencies.”

There have been many times skeptics have been wrong. For instance in 1995 Robert Metcalfe the founder of 3Com said that the internet would collapse by 1996. However, the internet is the most used technology in today’s world.

Image Source: “Flickr”

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