Neel Kashkari, President of the Minneapolis Federal Reserve and a longstanding cryptocurrency skeptic, recently signaled a slight shift in his position on digital currencies. Known for calling cryptocurrencies like Bitcoin “fraudulent” and “worthless,” Kashkari has historically criticized their lack of widespread utility and real economic impact. However, during a recent conversation with CoinDesk in New York, he stated he would “keep an open mind,” even as he voiced continued doubts about crypto’s practical use beyond speculation. Kashkari highlighted that, despite over a decade since Bitcoin’s launch, cryptocurrency remains limited mainly to investment portfolios without significant traction in the U.S. financial landscape, partly due to regulatory hurdles that isolate crypto from mainstream finance.
Amidst this cautious openness, broader political shifts could influence the Federal Reserve’s approach to cryptocurrency. Following Donald Trump’s recent election victory, the political landscape is expected to turn more favorable to the crypto industry. Trump’s proposed policies include removing SEC Chair Gary Gensler, whose regulatory stance is seen by crypto advocates as obstructive. Speculation surrounds whether Trump might encourage reform at the Fed to integrate crypto more fully into the U.S. financial system. Some of Trump’s allies, including vocal crypto supporter Elon Musk, favor a reduced role for the Federal Reserve in monetary oversight, adding potential pressure on its leaders like Kashkari to revisit long-held positions on digital assets.
Despite these changes, Kashkari remains largely unmoved, questioning the core utility of crypto assets and digital currency frameworks. His skepticism aligns with his broader stance on central bank digital currencies (CBDCs), which he has critiqued as lacking practical benefits and resembling a “handwaving word salad.” Whether Kashkari will indeed “keep an open mind” as the regulatory and political climate shifts remains uncertain, but his willingness to reconsider could suggest a gradual evolution in traditional finance’s perspective on crypto.
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