Fed Official Dismisses Crypto as Useless While Championing AI Potential In a stark comparison that has ignited debate within the financial technology sector, a prominent Federal Reserve official has delivered a scathing assessment of cryptocurrency while lavishing praise on artificial intelligence. Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, stated that crypto is utterly useless when measured against the transformative potential of AI. Kashkari made his comments during a recent public interview, drawing a sharp line between what he sees as two very different technological frontiers. He expressed deep skepticism about the fundamental value proposition of cryptocurrencies and digital assets, questioning their real-world utility beyond speculative trading. His critique extended specifically to stablecoins, a type of cryptocurrency designed to maintain a steady value by being pegged to a reserve asset like the U.S. dollar. Kashkari dismissed common arguments in favor of stablecoins as nothing more than a buzzword salad, suggesting the terminology is used to obscure a lack of substantive innovation or public benefit. He implied that the rhetoric surrounding stablecoins often sounds impressive but is devoid of clear, practical meaning when examined closely. In contrast, Kashkari positioned artificial intelligence as a genuinely groundbreaking technology with the capacity to drive significant gains in productivity across the entire economy. He highlighted AI’s potential to revolutionize sectors from healthcare to manufacturing, framing it as a tool that could fundamentally improve efficiency and output. This, he suggested, is the hallmark of a truly useful technological advancement, one that crypto has failed to demonstrate. The comments from the Fed president tap into an ongoing tension between established financial regulators and the rapidly evolving digital asset industry. Officials like Kashkari frequently point to concerns over investor protection, financial stability, and the use of crypto in illicit finance as reasons for their cautious stance. The perceived lack of a clear, positive economic impact beyond asset price volatility reinforces this regulatory skepticism. Unsurprisingly, the reaction from the cryptocurrency community was swift and critical. Many proponents argued that Kashkari’s views are outdated and fail to acknowledge the development of blockchain infrastructure, decentralized finance applications, and the potential for improved payment systems. They contend that comparing a new form of digital money and asset ownership to a general-purpose technology like AI is an unfair or misguided comparison, as they serve different primary functions. Others within crypto pointed to what they see as the hypocrisy of a central banker, whose institution controls the monetary supply, dismissing a technology built to provide an alternative. They see his comments as a defense of the traditional financial system against a disruptive challenger. Kashkari’s praise for AI also comes with its own context. While optimistic, he and other Fed officials have begun to discuss the economic implications of widespread AI adoption, including its potential impact on the labor market and long-term productivity growth. His commentary places the two technologies on a spectrum where one is viewed as a substantive engine for economic change and the other as a solution in search of a problem. This episode underscores the significant gap in perception between many traditional financial policymakers and the crypto industry. For regulators like Kashkari, the burden of proof remains squarely on digital assets to demonstrate tangible benefits that outweigh their risks. Until that proof is delivered in a form they find convincing, such stark dismissals are likely to continue, even as the industry continues to build and evolve.
