Minneapolis Federal Reserve President Neel Kashkari recently expressed concerns about the risks associated with cryptocurrencies. In his conversation with Pensions & Investments Editor-in-Chief Jennifer Ablan at the Linkedin Live event, Kashkari expressed concern about consumer protection in the context of Bitcoin and other cryptocurrencies.
Kashkari sees Bitcoin as a “consumer protection issue” and notes that some investors may not fully understand crypto investments. Kashkari warned that the volatility of cryptocurrencies could potentially harm many people. “There's a lot of fraud, deception and confusion, so I'm concerned from the consumer perspective,” Kashkari said.
He likened Bitcoin to Beanie Babies, arguing that it “has no real use in the economy other than being a nice toy that some people like to own and trade.” He added that the only use case he sees for Bitcoin is when traders are “trying to circumvent banking regulations, hide drug banking or illegal activity.”
Kashkari also made a comparison between Bitcoin and Amazon. Kashkari argued that unlike Amazon in 1994, Bitcoin has been around for more than a decade and still has no legitimate use in an advanced democracy. This statement sparked a debate and many people disagreed with Kashkari's views on Bitcoin's uses.
Kashkari, who has long been a Bitcoin skeptic, was more optimistic about cryptocurrencies five or six years ago.
*This is not investment advice.
