Fed’s Minneapolis President Neel Kashkari Labels Crypto “Utterly Useless” – Highlights Limits of Stablecoins
Minneapolis, Feb. 20 2026 – At the Midwest Economic Outlook summit on Thursday, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, warned that cryptocurrencies have failed to demonstrate practical value, especially when compared with the rapidly expanding use of artificial intelligence (AI). His remarks, which were broadcast live on the summit’s YouTube feed, have reignited a debate that has been simmering among regulators, policymakers and the digital‑asset industry.
What Kashkari Said
Kashkari, a veteran Fed official known for his candid commentary on monetary policy, argued that while AI “has not been around very long, people are using it every day,” crypto “has been around for more than a decade, and it’s utterly useless.” He emphasized that the technology has not produced a compelling use case that outweighs existing payment solutions.
The Fed chief also questioned the purported benefits of stablecoins. When asked what a stablecoin can do that mainstream platforms such as Venmo, PayPal or Zelle cannot, he described the standard industry response as “buzzword salad”—citing terms like “tokenized deposits” without clear practical advantages.
Kashkari illustrated his point with a personal anecdote about his father‑in‑law in the Philippines. Although the elder could receive a stablecoin quickly, he still faced conversion fees and had to rely on the local fiat system to actually spend the funds. The Fed president argued that such frictions undermine the claim that stablecoins are a cheap, border‑less payment method, especially when they depend on local monetary policies that are unlikely to be abandoned for a foreign digital token.
Context and Background
- Midwest Economic Outlook summit – An annual gathering of business leaders, policymakers and economists that focuses on regional and national growth trends. Kashkari’s remarks were part of a broader discussion on emerging technologies and their impact on the U.S. economy.
- Regulatory scrutiny – The Federal Reserve, along with the Securities and Exchange Commission (SEC) and other agencies, has been intensifying its review of crypto markets, particularly stablecoins that could function as de‑facto payment rails.
- Industry narrative – Proponents of stablecoins have promoted them as tools for inexpensive remittances, “tokenized” financial products, and a bridge to broader decentralized finance (DeFi) ecosystems.
Market Reaction
The comments prompted immediate responses on social media and from crypto‑focused analysts:
| Source | Reaction |
|---|---|
| CoinDesk analyst | “Kashkari’s critique is not new, but the ‘utterly useless’ phrasing adds fuel to a fire that’s already burning among regulators.” |
| Crypto exchange spokesperson | “Stablecoins continue to see adoption in emerging markets where traditional banking is limited; the Fed’s view overlooks real‑world usage data.” |
| Industry lobby group (Crypto Council) | “We welcome dialogue, but dismissing the entire sector after a decade ignores the rapid innovation and consumer demand for alternative payment solutions.” |
While the price of major cryptocurrencies showed a modest dip (Bitcoin fell ~2% in the hour following the remarks), stablecoin transaction volumes on platforms like Circle and Tether remained largely unchanged, suggesting that short‑term market moves may be limited.
Analysis
Kashkari’s blunt assessment is likely to influence ongoing policy discussions in two key areas:
- Regulatory framework for stablecoins – By highlighting the lack of clear “use‑case advantage” over existing payment apps, the Fed chief bolsters arguments for stricter oversight, including potential licensing requirements and capital reserve rules for issuers.
- Focus on AI as a growth driver – The comparison with AI may signal a shift in regulatory priorities. As AI integrates into financial services (e.g., risk modeling, fraud detection), agencies could allocate resources accordingly, leaving crypto to navigate a more uncertain regulatory landscape.
Nevertheless, Kashkari’s view may underestimate the nuanced role stablecoins play in cross‑border remittances, especially in regions with under‑banked populations. While conversion fees and local fiat dependence are real hurdles, many users value the speed and transparency that blockchain‑based transfers provide.
Key Takeaways
- Fed leadership is openly skeptical: Neel Kashkari described crypto as “utterly useless” and warned that stablecoins have yet to demonstrate a distinct advantage over established payment services.
- Stablecoins face practical friction: Conversion costs and reliance on local monetary policy remain challenges, particularly for international remittances.
- Regulatory focus may shift: The critic’s emphasis on AI could steer policymakers toward technologies with clearer, measurable economic impact, potentially tightening oversight of crypto and stablecoins.
- Market impact appears muted: Short‑term price reactions were modest; however, ongoing regulatory scrutiny could affect long‑term investment and adoption dynamics.
- Industry response is mixed: While some stakeholders see the comments as a catalyst for clearer rules, others argue that crypto’s real‑world use cases are being overlooked.
Kashkari concluded by urging policymakers to cut through “buzzword salad” and demand concrete answers about how crypto and stablecoins can deliver tangible benefits beyond what existing payment platforms already offer.
The article is based on statements made by Neel Kashkari at the 2026 Midwest Economic Outlook summit and incorporates analysis from market observers. For full context, the original remarks are available on the summit’s YouTube channel.
Source: https://cointelegraph.com/news/fed-neel-kashkari-lashes-crypto-and-stablecoins?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
