MinneapolisFederalReservePresidentNeelKashkarionMondaydismissedcryptoasthecurrencyofdrugdealsandothercriminalenterprises.
KashkaritoldaudiencemembersatatownhallinWisconsinthat“veryfewtransactionsareactuallyhappening”incrypto,avideooftheeventhostedbytheChippewaFallsAreaChamberofCommerceshows.Thecommentsunderscorethebankregulator\'sresistancetocrypto,evenasinstitutionaladoptionoftheassetclassheatsup.
“They\'renotpayingforgoodsandservicesusingcrypto,”KashkarisaidMonday.“Italmostneverhappensunlesspeoplearebuyingdrugsorotherillegalactivities.”
Kashkari,whoclinchedtheFederalReserveBankofMinneapolis’highestofficein2016,hasoftenscoffedatBitcoinandothercryptocurrencies.
Fouryearsago,theformerinvestmentbankercomparedthedigitalassetmarkettoa“giantgarbagedumpster.”And,in2021,hesimilarlybemoanedthemarketwasoverrunwith“thousandsofgarbagecoins”ataconferenceinMontana.
Proponentsofthecryptocurrencyindustryhaveoftencounteredthosecriticisms,however.AndonMonday,theyagainpushedbackagainsttheregulator\'sabrasiveremarks.
“Ithinkbeingthiswrongshouldbeillegal,”CastleIslandVenturespartnerNicCartersaidMondayonX,respondingtoKashkari’scomments.
CustodiaBankCEOCaitlinLongandBrownRudnickPartnerHaileyLennonjoinedthechorusofcryptoindustrysupporterscriticizingtheregulator\'sbleakassessmentofthedigitalassetsmarket.
“Legitimatecryptoprojectsinthespacehavestateoftheartanti-moneylaunderingpoliciestopreventthis,”LennonsaidinanXpost.“We’vebeenfightingthisfalsenarrativefordecades.”
TheFederalReservesystemgovernstheregionalandfederalbanksystems,includingcrypto-relatedbankingintheU.S.Ithastheauthoritytoissuerestrictionsoncryptobanking,inadditiontothepowertoissueacentralbankdigitalcurrency.
Just17%ofAmericanadultsreportedeverhavingowneddigitalassetsin2023,accordingtoaPewResearchCentersurvey,althoughindustry-fundedpollshavesetthatnumbermuchhigher.Meanwhile,U.S.FederalReservedatashowsthatjust2%oftheUSadultpopulationmadeapaymentusingcryptocurrenciesin2022.
Institutionaladoptionofcrypto,however,haspickedupinrecentmonths,acceleratedbytheapprovalofspotbitcoinandetherETFsintheU.S.earlierthisyear.Roughly80%ofinstitutionalinvestorsandwealthmanagersreportedplanningtoincreasetheirinvestmentsindigitalassetsinthecomingmonths,accordingtoa2024pollfromEurope-basedinvestmentmanagerNickelDigital.
decrypt.co