Neel Kashkari Claims That Cryptocurrency is “95% fraud, hype, noise, and confusion.”
Neel Kashkari is not a Bitcoin fan.
The president of the Federal Reserve Bank of Minneapolis said at an economic summit on Tuesday his stance on digital assets is that the cryptocurrency sector funds illegal activities and is rife with fraud.
Asked to comment on the growing market for digital assets and initiatives such as the creation of Miami’s cryptocurrency, the central banker said, “Five or six years ago, we were much more optimistic about cryptocurrencies and Bitcoin.”
“So far, we’ve worked with …….. 95% of the fraud, hype, noise, and confusion.”
Kashkari, who was attending the Pacific Northwest Regional Economic Summit in Montana, argued that the dollar has remained strong because of restrictions on its creation and use.
The Federal Reserve chairman said, “thousands of such currencies have been created, some of them fraudulent Ponzi schemes”.
The central banker added that it would be hard to find anyone who could articulate how Bitcoin is a better solution to a major problem than existing currencies.
Bitcoin has been on a rollercoaster ride over the past year, with the value of the digital asset rising from less than $12,000 a year ago to a peak of over $63,500 in April.
Since then, the price of bitcoin has fallen more than 3 percent in the past 24 hours to about $45,250 on Wednesday, giving up some of its gains, according to CoinDesk.
The rise in the price of the popular cryptocurrency, and similar coins such as Ether and Dogecoin, has grown along with its popularity among private investors and increasing ownership by companies and institutions.
In addition, Bitcoin is seen as a tool to avoid corporate gatekeeping. Now, even large corporations are getting in on the action.
The rise of Bitcoin has also attracted interest and criticism from central banks, some of which are trying to create their state-backed digital currencies.
Mr. Kashkari is the latest central bank voice to add to criticism of cryptocurrencies. Christine Lagarde, president of the European Central Bank (ECB), called for global regulation of Bitcoin earlier this year, saying multilateral action was needed to curb “shady business” and money laundering.