Federal Reserve Bank President Says ‘Entire Notion of Crypto Is Nonsense’
Nov 22, 2022 10:57 UTC
Nov 22, 2022 at 10:57 UTC
The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, says crypto exchange FTX isn’t “one dishonorable company in an exceedingly serious trade.” Stating that the “Entire notion of crypto is nonsense,” the Fed president claimed it’s “just a tool of speculation and bigger fools.”
Minneapolis Fed President Neel Kashkari on Crypto and FTX Collapse
Federal Reserve Bank of Minneapolis President Neel Kashkari shared his read on the collapse of cryptocurrency exchange FTX Friday.
“This isn’t [a] case of 1 dishonorable company in an exceedingly serious trade,” he tweeted, elaborating:
“Entire notion of crypto is nonsense. Not helpful for payments. No inflation hedge. No insufficiency. No taxing authority. simply a tool of speculation and greater fools.”
Kashkari has never been an addict of bitcoin or crypto. He antecedently referred to as them “a large garbage container.” In August last year, he same bitcoin and crypto were “95% fraud, hype, noise, and confusion,” stating: “I’ve not seen any use case apart from funding illicit activities like medication and vice crime.”
Following the FTX meltdown, many Fed officers involved stricter cryptocurrency regulation. Fed Vice Chair Lael Brainard has stressed the importance of sturdy cryptocurrency oversight. “It’s extremely important to visualize that retail investors are extremely getting hurt by these losses,” she opined.
Michael Barr, Federal Reserve’s vice chair for oversight, same in response to an issue at a Senate Banking Committee hearing last week:
We’re involved concerning the risks that we tend to don’t comprehend within the non-bank sector. that has clearly crypto activity … which will produce risks that blow back to the financial set-up that we tend to do regulate.
While Kashkari believes that the FTX collapse isn’t the case of 1 dishonorable company within the crypto trade, some individuals have distinguished that the exchange meltdown isn’t crypto-specific. FTX and its former business executive SAM Bankman-Fried are compared to the Enron fraud or Bernie Madoff’s Ponzi theme.
Shark Tank star and also the owner of the NBA team metropolis Mavericks, Mark Cuban, explained that recent blowups of corporations within the crypto area, as well as FTX, “have not been crypto blowups.” He emphasized: “They are banking blowups … loaning to the incorrect entity, misvaluations of collateral, proud arbitrages, followed by investor runs.”