Minneapolis Federal Reserve President Neel Kashkari says crypto is “95% fraud, hype, noise, and confusion.” He added, “I’ve not seen any use case other than funding illicit activities like drugs and prostitution.”

Federal Reserve Bank of Minneapolis’ President Says Crypto Is ‘95% Fraud, Hype, Noise and Confusion’

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, talked about bitcoin and cryptocurrency Tuesday at the Pacific Northwest Economic Regional Annual Summit in Big Sky, Montana.

Responding to a question about cryptocurrency given what Miami is doing with bitcoin and its own recently launched Miami coin, Kashkari said:

I was more optimistic about crypto or bitcoin about five or six years ago. So far, what I’ve seen is 99% … Let me be charitable, 95% fraud, hype, noise and confusion.

He also does not see any legitimate use case for bitcoin. “I’ve not seen any use case other than funding illicit activities like drugs and prostitution. I have not seen any use case that is legitimate so far that bitcoin solves. But if you want to launch Montana coin, don’t let me stop you,” the Fed official said.

Some other government officials have voiced similar concerns. U.S. Treasury Secretary Janet Yellen said earlier this year that “Cryptocurrencies are a particular concern,” emphasizing that “many are used, at least in a transactions sense, mainly for illicit financing.”

The president of the Minneapolis Federal Reserve Bank continued: “If you go in your basement, and you want to start producing your own currency, the secret service is going to come knock on your door and put you in handcuffs.” He added: “There is no barrier to you creating your own bitcoin or me creating my own — I’ll call it neelcoin.”

Commenting on the sheer number of cryptocurrencies on the market, Kashkari opined:

There are thousands of these garbage coins that have been created. Some of them are complete fraud, Ponzi schemes, where they pump it up, they dupe people to invest money and then the founders rip them off.

In February, Kashkari similarly said that bitcoin and other cryptocurrencies were “like a giant garbage dumpster.”

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