Neel Kashkari’s Devastating Critique: Minneapolis Fed President Calls Cryptocurrency Completely Useless

MINNEAPOLIS, April 2025 – In a statement that has reignited a fundamental debate about the future of money, Minneapolis Federal Reserve President Neel Kashkari has delivered a stark assessment of the digital asset sector. According to a report by Walter Bloomberg, the prominent central banker declared cryptocurrency to be completely useless. This critique from a sitting Fed official immediately sent ripples through financial markets and policy circles, forcing a renewed examination of crypto’s practical role within the modern economic framework.

Neel Kashkari’s Cryptocurrency Critique in Context

Neel Kashkari’s skepticism is not a new development. Consequently, his latest comments represent a crystallization of long-held views. As President of the Minneapolis Fed since 2016, Kashkari has consistently questioned the foundational value proposition of cryptocurrencies like Bitcoin and Ethereum. He often contrasts them with the established functions of traditional fiat currency, which include being a stable unit of account, a reliable medium of exchange, and a store of value backed by sovereign authority. Kashkari’s perspective is particularly influential because he operates within the U.S. Federal Reserve System, the institution responsible for managing the world’s primary reserve currency.

Furthermore, his critique arrives at a pivotal regulatory moment. Various U.S. agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), are actively shaping the legal landscape for digital assets. Kashkari’s voice adds significant weight to the cautious, scrutiny-focused side of this ongoing policy discussion. His position suggests that from a central banking viewpoint, cryptocurrencies currently fail to solve core monetary or payment system problems efficiently.

The Federal Reserve’s Evolving Stance on Digital Assets

Kashkari’s view, while pointed, exists on a spectrum within the Fed itself. Other officials have expressed more nuanced or even cautiously optimistic positions. For instance, the Federal Reserve Board has been researching a Central Bank Digital Currency (CBDC), a digital form of the U.S. dollar. This project implicitly acknowledges the technological shift towards digital finance while seeking to maintain central bank control. The table below illustrates the contrasting perspectives within the U.S. financial regulatory landscape.

This diversity of opinion highlights a central tension. The financial system is grappling with how to categorize and govern an entirely new asset class. Kashkari’s “useless” label represents one extreme of this debate, challenging proponents to demonstrate tangible, systemic utility beyond speculative trading.

Analyzing the “Useless” Argument: Volatility and Real-World Use

Economists often dissect Kashkari’s critique by examining core monetary principles. A primary argument against crypto’s utility as “money” is its extreme price volatility. For example, a currency that can lose or gain 10% of its value in a single day creates immense risk for both buyers and sellers. This instability undermines its function as a:

• Unit of Account: Businesses cannot reliably price goods in a wildly fluctuating currency.
• Medium of Exchange: Transaction counterparties face significant settlement risk.
• Store of Value: Savers cannot trust the asset to preserve purchasing power over time.

Additionally, critics point to the energy intensity of proof-of-work networks and the prevalence of fraud and market manipulation in largely unregulated exchanges. These real-world problems, they argue, substantiate the view that the technology, in its current form, creates more problems than it solves for the average consumer. However, blockchain advocates counter that these are growing pains of a nascent technology, not inherent flaws.

Market Reaction and Industry Response

The immediate market reaction to Kashkari’s comments was notably muted, suggesting a maturation in how such news is processed. Five years ago, a similar statement from a Fed official might have triggered a sharp sell-off. Today, the market appears to factor regulatory skepticism into its pricing models. Nevertheless, industry representatives were quick to respond. They typically frame Kashkari’s position as outdated or rooted in a desire to protect the existing financial system from disruption.

Industry advocates highlight several areas where they believe cryptocurrency and blockchain technology provide clear utility:

• Cross-Border Payments: Potentially faster and cheaper remittances.
• Programmable Money: Smart contracts enabling automated, trustless agreements.
• Digital Ownership: Tokenization of real-world assets like real estate or art.
• Censorship Resistance: Providing financial access in unstable geopolitical regions.

This ongoing dialogue between regulators and innovators is crucial. It shapes the development of laws that aim to mitigate risks without stifling potential technological benefits. Kashkari’s blunt assessment serves as a high-profile pressure test for the industry’s value narratives.

Historical Parallels and the Path Forward

Historically, new technologies and asset classes often face skepticism from established institutions. The internet, for instance, was once dismissed as a fad with limited commercial application. The key difference with cryptocurrency is its direct challenge to state-controlled monetary sovereignty. Therefore, regulatory pushback is both expected and intense. The path forward likely involves continued experimentation, inevitable market consolidation, and gradual regulatory clarity.

Ultimately, the debate Kashkari has amplified is less about the technology’s existence and more about its appropriate scope. Will cryptocurrencies remain a niche, speculative asset class and a tool for specific technological applications? Alternatively, could they evolve into a widely accepted parallel financial system? The answers will depend on solving practical issues around scalability, user experience, security, and, most critically, demonstrating reproducible utility for mainstream users.

Conclusion

Minneapolis Fed President Neel Kashkari’s declaration that cryptocurrency is completely useless provides a stark, official counterpoint to the exuberance often surrounding digital assets. His critique forces a necessary and rigorous examination of what true economic utility means. While the market may have absorbed this specific comment, the underlying debate it represents remains unresolved. The future of cryptocurrency will be determined not by rhetorical battles, but by its ability to transition from speculative instrument to a technology that reliably solves real-world financial problems for a broad population. Until then, assessments like Kashkari’s will continue to frame a critical policy discussion.

FAQs

Q1: What exactly did Neel Kashkari say about cryptocurrency?
According to a report by Walter Bloomberg, Minneapolis Federal Reserve President Neel Kashkari stated that he believes cryptocurrency is “completely useless,” reiterating his long-standing skepticism about its fundamental value and utility in the financial system.

Q2: Why is Neel Kashkari’s opinion on crypto important?
As a sitting president of a regional Federal Reserve Bank, Kashkari’s views carry significant weight in monetary policy and regulatory discussions. His skepticism influences the broader debate within the U.S. government about how to regulate and integrate digital assets.

Q3: Do all Federal Reserve officials agree with Kashkari’s view?
No, views within the Fed vary. Chair Jerome Powell has expressed a more cautious, observant stance, acknowledging innovation while emphasizing the need for strong regulation, particularly for stablecoins that are pegged to traditional currencies.

Q4: How did the cryptocurrency market react to Kashkari’s comments?
The immediate market reaction in April 2025 was relatively muted, suggesting that investor sentiment already incorporates expectations of regulatory skepticism, marking a potential maturation in how the sector processes such news.

Q5: What are the main arguments against cryptocurrency’s utility?
Primary critiques include extreme price volatility, which undermines its use as stable money; high energy consumption for some networks; its use in illicit finance; and a lack of widespread adoption for everyday transactions compared to traditional payment systems.