Federal Reserve’s Minneapolis President Neel Kashkari Dismisses Crypto as “Utterly Useless” at Midwest Economic Outlook Summit
Fargo, N.D., Feb. 23, 2026 – At the 2026 Midwest Economic Outlook Summit, Federal Reserve Bank of Minneapolis President Neel Kashkari delivered a sharp rebuke of digital assets while also defending the central bank’s independence from political pressure. His remarks, first reported by Bloomberg, have reignited debate over the economic relevance of cryptocurrencies and stablecoins.
What Kashkari Said
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Crypto’s practical value: Kashkari argued that more than a decade after its emergence, the cryptocurrency ecosystem has not demonstrated a meaningful use case for everyday consumers or businesses. He likened the sector to past speculative fads, noting that “crypto has been around for more than a decade and it’s utterly useless.”
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AI vs. crypto: In contrasting the two emerging technologies, he highlighted artificial‑intelligence tools as examples of innovation that have already delivered tangible benefits to both households and firms, whereas crypto has yet to prove comparable utility.
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Stablecoins under scrutiny: While acknowledging that stablecoins are promoted as a cheaper, faster alternative for cross‑border payments, Kashkari questioned their real‑world advantage. He pointed out that recipients still need to convert the digital token into a local currency to make purchases, adding a layer of friction that existing payment platforms—such as Venmo, PayPal, or Zelle—do not require. “If I can send you $5 instantly through a service you already use, what does a stablecoin add?” he asked during a Q&A session.
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Regulatory concerns: Kashkari warned that many crypto transactions appear designed to sidestep banking regulations, including know‑your‑customer and anti‑money‑laundering rules, a practice he described as “lousy” from the perspective of a monetary‑policy maker.
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Fed independence: Turning to a separate issue, Kashkari defended the Federal Reserve’s autonomy, criticizing recent remarks from National Economic Council Director Kevin Hassett about a New York Fed study on tariffs. He framed such commentary as an attempt to erode the central bank’s independence, citing a December Department of Justice subpoena related to the Board of Governors’ building expenses as part of a broader pattern of political pressure.
- Economic backdrop: The president noted that inflation has moderated to a range of roughly 2.5 %‑3 % while the unemployment rate has edged up from about 3.5 % to 4.3 %. He described current monetary policy as “close to neutral” after a series of rate cuts over the past two years.
Context and History
Kashkari’s comments echo a critique he made last November, when he compared the cryptocurrency boom to the 1990s Beanie‑Babies craze. In a CNN interview he reiterated confidence in AI’s economic impact while maintaining that crypto still lacks a compelling, everyday purpose.
Analysis
Market perception: The Fed’s top regional official publicly dismissing crypto could temper enthusiasm among investors and developers, especially those seeking validation from mainstream financial institutions. While the Federal Reserve does not regulate cryptocurrencies directly, its leadership’s stance often shapes broader regulatory sentiment.
Regulatory outlook: Kashkari’s focus on the risk of regulatory evasion underscores a persistent concern among policymakers. If crypto activities are increasingly viewed as a conduit for circumventing AML/KYC requirements, we may see stricter enforcement actions or new legislative proposals aimed at tightening oversight of digital asset platforms.
Stablecoin viability: By highlighting the conversion step required for stablecoins to be used in everyday transactions, Kashkari raises a practical hurdle that stablecoin issuers must address. Projects that can integrate seamless fiat on‑ramps or partner with established payment networks may be better positioned to demonstrate the “useful” qualities he deems absent.
Fed independence narrative: The president’s defense of central‑bank autonomy comes at a time of heightened political scrutiny of monetary policy. By linking criticism of crypto to broader attacks on the Fed’s independence, Kashkari signals that any attempts to politicize policy decisions—including potential crypto‑related regulation—will be resisted.
Key Takeaways
- Crypto’s utility remains unproven: Kashkari asserts that digital currencies have not shown a clear, everyday purpose for U.S. consumers or businesses.
- Stablecoins face practical friction: The need to convert tokens back into fiat for routine spending diminishes the purported advantage over existing payment apps.
- Regulatory caution persists: The Fed’s leadership continues to view crypto transactions that bypass banking compliance as a red flag.
- AI is seen as a proven driver of economic value: In contrast to crypto, artificial‑intelligence tools are cited as delivering measurable benefits.
- Fed independence is a priority: Kashkari warns against political pressures that could compromise the central bank’s ability to set policy based on data and analysis.
- Economic environment: Inflation is moderating while unemployment is modestly higher; monetary policy is approaching a neutral stance after a series of rate cuts.
As the cryptocurrency sector continues to evolve, the Fed’s skepticism—particularly from a high‑profile regional president—adds another layer of complexity to the dialogue between innovators, regulators, and the broader financial system. Stakeholders will be watching closely to see whether future policy decisions reflect Kashkari’s assessment or if emerging use cases can shift the narrative toward greater acceptance.
Source: https://bitcoinmagazine.com/news/feds-kashkari-crypto-utterly-useless
