Crypto’s Are ‘Burning Garbage’ Because The Govt Doesn’t Have A ‘Legal Monopoly’ On Them
- Cryptos are “like a giant garbage dumpster” and lack any basic characteristics of any stable currency, said Neel Kashkari, Minneapolis Federal Reserve President
- The Fed chief praised SEC for “cracking down” on fraudulent coin offerings
- Currently “burning garbage,” cryptos could prove useful in the future, he said
Even after being declared the best performing asset of the decade with 9 million percent of gains, there are still some bitcoin and crypto detractors left. The latest detractor is Minneapolis Federal Reserve President Neel Kashkari that didn’t pull any punches while sharing his views on cryptocurrencies.
During a Montana event, when asked about whether he would want to gift his 1-year-old daughter a Treasury bond or a bitcoin for her next birthday, the Fed official picked the former saying digital currencies are “like a giant garbage dumpster.”
Ouch! The crypto market is used to these comments though. However, over the past year with the central banks focusing on their own digital currencies and cryptocurrencies experiencing increased awareness and adoption, many skeptics have turned into believers. But not Kashkari, it looks like. Back in 2018, he deemed crypto assets a “farce” saying,
“The barrier to entry to creating a new cryptocurrency is zero. I'm seeing more noise and more fraud than I'm seeing anything useful.”
Giant Garbage Dumpster could be Useful in Coming Decades
While blasting cryptos, he did praise the dollar’s stability compared to the nascent crypto industry. The exact dollar that has lost over 96% of its value since the Fed first came into the picture. He said,
“The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar.”
“In the virtual-currency and cryptocurrency world, there are thousands of these garbage coins out there. Literally, people have been fleeced for tens of billions of dollars, and finally the SEC is getting involved in cracking down on this.”
So, it’s all about the central bank’s control over the money! Given that Fed can print money with just the push of the button and prop up the stock market to its all-time highs and longest-running bull market in history, a coin like bitcoin of which there will ever be only 21 million, does seem scary.
On the regulatory front, SEC commissioner “Crypto Mom” has proposed a three-year harbor to support digital currency innovation, though still, the US is way behind the crypto haven countries like Switzerland.
However, even Kashkari has seen some potential in crypto which he said could prove important in the coming decades. Kashkari said,
“Maybe five years from now or 10 years from now or 20 years from now something useful will emerge from this, but so far, all that's emerging is burning garbage.”