Fed’s Kashkari Calls Crypto ’Utterly Useless’, Dismisses Stablecoins as a ’Buzzword Salad’
Neel Kashkari, president of the Minneapolis Federal Reserve, sharply criticized cryptocurrencies and stablecoins at the 2026 Midwest Economic Outlook Summit in Fargo. He said bitcoin and other crypto assets have existed for more than a decade without demonstrating “any practical use,” arguing that artificial intelligence shows clear everyday utility while crypto has not delivered meaningful benefits. Kashkari dismissed claims that stablecoins improve payments, calling industry terminology a “buzzword salad” and saying dollar-backed stablecoins offer little advantage over incumbent tools such as Venmo. He questioned stablecoin utility for remittances, noting conversion fees and local-currency frictions that reduce their practical value — citing a family example in the Philippines where rapid arrival still required costly conversion to local fiat. Kashkari acknowledged some adoption in emerging markets but emphasized frictions and added costs that limit usefulness. His remarks highlight a clear divergence between the Fed’s skeptical stance and members of the U.S. administration who publicly back regulated stablecoins and proposals like a strategic bitcoin reserve. For traders: the comments signal continued regulatory skepticism from Federal Reserve leadership, which could increase political and regulatory scrutiny of stablecoins and broader crypto policy debates — factors that may amplify volatility around major crypto assets and USDC/other dollar-backed stablecoins in particular.
Bearish
Kashkari’s high-profile, unequivocal criticism from a Federal Reserve president increases perceived regulatory and political risk for crypto, particularly dollar-backed stablecoins and bitcoin. For traders, such remarks from Fed leadership can prompt short-term volatility as markets price in potential regulatory tightening, increased oversight of stablecoins, or policy conflict between the Fed and pro-crypto government actors. Stablecoins could see outflows or repricing risk if regulatory scrutiny leads to operational constraints or stricter rules; BTC may face downside pressure from elevated policy uncertainty and reduced institutional appetite in the near term. Over the longer term the fundamentals of major networks remain intact, but sustained regulatory hostility would likely dampen inflows and slow adoption. Overall, immediate impact is likely negative (bearish) for price action due to heightened regulatory risk and short-term volatility.