{"id":93128,"date":"2026-02-20T00:05:00","date_gmt":"2026-02-20T05:05:00","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=93128"},"modified":"2026-02-19T23:59:55","modified_gmt":"2026-02-20T04:59:55","slug":"feds-kashkari-calls-crypto-utterly-useless-why-his-broadside-matters-for-bitcoin-stablecoins-and-wall-street","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/02\/2026\/feds-kashkari-calls-crypto-utterly-useless-why-his-broadside-matters-for-bitcoin-stablecoins-and-wall-street.html","title":{"rendered":"Fed\u2019s Kashkari Calls Crypto \u201cUtterly Useless\u201d: Why His Broadside Matters for Bitcoin, Stablecoins, and Wall Street"},"content":{"rendered":"\n
\"\"<\/a><\/figure>\n\n\n\n

(HedgeCo.Net) When\u00a0Neel Kashkari<\/strong>, president of the Federal Reserve Bank of Minneapolis, said crypto has been around \u201cfor more than a decade\u201d and is\u00a0\u201cutterly useless,\u201d<\/strong>\u00a0he wasn\u2019t just tossing out a spicy soundbite. He was signaling\u2014plainly\u2014that a meaningful faction within the U.S. central banking system still views the core crypto thesis as\u00a0unproven<\/strong>,\u00a0redundant<\/strong>, and potentially\u00a0destabilizing<\/strong>\u00a0if it scales in the wrong way.\u00a0<\/p>\n\n\n\n

For markets that have spent years trying to price in \u201cinstitutional adoption,\u201d \u201cmainstream legitimacy,\u201d and \u201cregulatory clarity,\u201d Kashkari\u2019s critique lands like a splash of cold water. It\u2019s also arriving at an awkward moment: crypto is simultaneously trying to mature into infrastructure (payments, settlement, tokenized assets) while still behaving, at times, like a high-beta macro trade\u2014sensitive to liquidity, rates, and sentiment.<\/p>\n\n\n\n

This is why Kashkari\u2019s remarks matter. They sharpen the policy debate around what crypto is for<\/em>, who benefits, and where the risk sits\u2014especially around stablecoins<\/strong>, which are increasingly viewed as the real bridge between traditional finance and digital rails.<\/p>\n\n\n\n

What Kashkari actually said\u2014and what he was aiming at<\/h3>\n\n\n\n

Kashkari\u2019s comments came during a public appearance and Q&A in North Dakota. He framed his critique around utility<\/strong>: if crypto is supposed to be money or a payment system, he argued, it has not demonstrated consumer advantages after more than a decade. <\/p>\n\n\n\n

His sharpest policy punch was aimed at stablecoins<\/strong>. Kashkari challenged the claim that stablecoins represent a breakthrough for everyday payments, saying that existing tools already let consumers move funds instantly and cheaply. \u201cI can send any one of you $5 with Venmo or PayPal or Zelle,\u201d he said, before asking what a \u201cmagical stablecoin\u201d can do that those systems cannot. <\/p>\n\n\n\n

CoinDesk reported he also dismissed stablecoins as \u201cbuzzword salad,\u201d reinforcing the idea that he sees much of the stablecoin pitch as marketing layered over capabilities that the legacy system already delivers. <\/p>\n\n\n\n

The framing is important: Kashkari isn\u2019t arguing crypto can\u2019t trade, can\u2019t rally, or can\u2019t attract capital. He\u2019s arguing it still fails a basic test of real-world usefulness<\/strong> at scale\u2014especially when compared to technologies like AI that, in his view, already deliver tangible productivity gains. <\/p>\n\n\n\n

Why a Fed president\u2019s skepticism is not just \u201cnoise\u201d<\/h3>\n\n\n\n

It\u2019s tempting for crypto markets to brush off criticism from policymakers as an evergreen storyline\u2014something that flares, fades, and repeats. But Kashkari\u2019s position matters for three reasons.<\/p>\n\n\n\n

First, it reflects a durable policy worldview.<\/strong>
Within central banking, \u201cinnovation\u201d is not automatically a virtue. The default posture is cautious: prove the benefit, quantify the risk, and show why existing regulated systems cannot deliver the same improvement with fewer externalities. Kashkari\u2019s Venmo\/Zelle comparison is essentially that framework in one sentence. <\/p>\n\n\n\n

Second, it shapes the \u201ctone\u201d around regulation even when it doesn\u2019t write the rules.<\/strong>
Fed officials don\u2019t pass legislation. But their views influence how regulators, lawmakers, and bank supervisors talk about the tradeoffs\u2014especially around stablecoins, bank deposits, payments, and financial stability.<\/p>\n\n\n\n

Third, it intersects with the most consequential crypto product category: stablecoins.<\/strong>
Bitcoin can be dismissed as a speculative store-of-value experiment and still thrive as an asset. Stablecoins are different. They function as payment instruments<\/strong> and settlement assets<\/strong> that touch banking, deposits, money markets, and potentially monetary transmission. When a Fed president is openly skeptical, that skepticism has downstream effects.<\/p>\n\n\n\n

The stablecoin question: \u201cPayments\u201d or \u201cbanking without banks\u201d?<\/h3>\n\n\n\n

Kashkari\u2019s stablecoin challenge\u2014\u201cWhat can it do that Venmo or Zelle can\u2019t?\u201d\u2014is a common critique from traditional finance. It\u2019s persuasive at the consumer layer, where the U.S. already has fast-ish payment experiences.<\/p>\n\n\n\n

But stablecoin advocates would argue the real point is not sending $5 to a friend. The value proposition is more structural:<\/p>\n\n\n\n

    \n
  • 24\/7 settlement<\/strong>\u00a0(not limited by banking hours or cutoffs)<\/li>\n\n\n\n
  • Programmability<\/strong>\u00a0(conditional payments, escrow-like functionality, automated distribution)<\/li>\n\n\n\n
  • Cross-border transfer<\/strong>\u00a0with fewer intermediaries<\/li>\n\n\n\n
  • Composability<\/strong>\u00a0with trading, lending, and tokenized assets in crypto-native systems<\/li>\n<\/ul>\n\n\n\n

    Kashkari\u2019s rejoinder implies: even if those are real, they do not yet justify the systemic risks or the hype\u2014especially if stablecoins grow large enough to pressure traditional banking.<\/p>\n\n\n\n

    And that\u2019s where the debate becomes less about consumer UX and more about balance sheets<\/strong>.<\/p>\n\n\n\n

    If stablecoins become a major store of transaction balances, what happens to bank deposits<\/strong>? What happens to the cheap funding base that supports bank lending? Kashkari has previously expressed caution about stablecoins for exactly this reason, and coverage of his remarks highlights ongoing concern that widespread stablecoin adoption could change bank funding dynamics. <\/p>\n\n\n\n

    Even if you believe stablecoins are useful, a central banker is likely to see them through a stability lens:<\/p>\n\n\n\n

      \n
    • Are reserves safe and transparent?<\/li>\n\n\n\n
    • What happens in a run?<\/li>\n\n\n\n
    • Who has redemption rights?<\/li>\n\n\n\n
    • What\u2019s the backstop, if any?<\/li>\n\n\n\n
    • Does this migrate money away from regulated deposit-taking?<\/li>\n<\/ul>\n\n\n\n

      That\u2019s why stablecoins\u2014more than Bitcoin\u2014are the regulatory battlefield.<\/p>\n\n\n\n

      Bitcoin gets caught in the crossfire\u2014fairly or not<\/h3>\n\n\n\n

      Kashkari\u2019s \u201cutterly useless\u201d line was aimed broadly at \u201ccrypto,\u201d and that bundling matters. Policymakers often lump Bitcoin, meme tokens, DeFi protocols, stablecoins, and blockchain infrastructure into one category: \u201ccrypto.\u201d<\/p>\n\n\n\n

      Markets don\u2019t. Investors differentiate:<\/p>\n\n\n\n

        \n
      • Bitcoin<\/strong>\u00a0as a scarce asset with a monetary narrative<\/li>\n\n\n\n
      • Stablecoins<\/strong>\u00a0as transactional rails and liquidity infrastructure<\/li>\n\n\n\n
      • Smart contract platforms<\/strong>\u00a0as application layers<\/li>\n\n\n\n
      • Tokens<\/strong>\u00a0as risk capital \/ venture-like exposures<\/li>\n<\/ul>\n\n\n\n

        But politically and rhetorically, bundling persists. Kashkari\u2019s critique reinforces a policy stance that sees crypto\u2019s public use case as thin relative to its footprint in speculation and leverage.<\/p>\n\n\n\n

        For Bitcoin holders, the practical impact is less \u201cthe Fed will ban it\u201d and more subtle:<\/p>\n\n\n\n

          \n
        • Skeptical Fed rhetoric can slow institutional comfort.<\/li>\n\n\n\n
        • It can harden supervisory scrutiny for banks offering crypto services.<\/li>\n\n\n\n
        • It can tilt the debate toward stricter stablecoin frameworks, which affects crypto liquidity.<\/li>\n<\/ul>\n\n\n\n

          In other words: Bitcoin may be decentralized, but the ramps<\/em>\u2014banking relationships, custody, compliance, payment channels\u2014still live in the regulated world.<\/p>\n\n\n\n

          Why the timing matters in 2026<\/h3>\n\n\n\n

          Kashkari\u2019s comments aren\u2019t happening in a vacuum. They\u2019re landing in a market environment where crypto is already being judged more harshly:<\/p>\n\n\n\n

            \n
          • Investors are asking which crypto segments generate\u00a0real cash flow<\/strong>\u00a0or\u00a0real utility<\/strong>.<\/li>\n\n\n\n
          • Regulators are pushing for clearer definitions, better disclosures, and stronger consumer protections.<\/li>\n\n\n\n
          • Traditional finance is inching into tokenization and on-chain settlement experiments\u2014sometimes without embracing \u201ccrypto culture.\u201d<\/li>\n<\/ul>\n\n\n\n

            That last point is key: parts of what crypto promised (programmable settlement, faster rails) are now being pursued by banks, fintechs, and payment networks in regulated forms. Kashkari\u2019s argument implicitly supports that pathway: innovate\u2014yes, but do it in ways that don\u2019t create parallel shadow money.<\/p>\n\n\n\n

            The \u201cAI vs crypto\u201d contrast is the real message<\/h3>\n\n\n\n

            Kashkari contrasted crypto with AI, saying AI has tangible long-term potential for the U.S. economy and that people use AI tools daily. <\/p>\n\n\n\n

            That comparison is revealing. It\u2019s not just a dig\u2014it\u2019s a statement about what kinds of innovation central bankers will celebrate:<\/p>\n\n\n\n

              \n
            • measurable productivity gains<\/li>\n\n\n\n
            • clear consumer benefits<\/li>\n\n\n\n
            • broad adoption outside trading markets<\/li>\n\n\n\n
            • lower risk of destabilizing financial plumbing<\/li>\n<\/ul>\n\n\n\n

              Crypto\u2019s challenge is that its most visible product remains speculation<\/strong>, even if underneath there is genuine innovation in settlement, custody, and programmable finance.<\/p>\n\n\n\n

              What this means for investors and allocators<\/h3>\n\n\n\n

              Kashkari\u2019s critique doesn\u2019t end the crypto story. But it does reinforce a more demanding investment framework\u2014especially for institutional allocators who need a policy-safe narrative.<\/p>\n\n\n\n

              If you\u2019re long Bitcoin:<\/strong>
              Expect the macro\/policy debate to remain a volatility catalyst. Bitcoin can rally while policymakers scoff\u2014but sharp rhetoric can still influence marginal flows, especially through regulated channels.<\/p>\n\n\n\n

              If you\u2019re watching stablecoins:<\/strong>
              The message is clear: stablecoins will be regulated as a matter of financial stability, not treated as harmless fintech. Kashkari\u2019s Venmo\/Zelle line is a preview of the questions policymakers will keep asking. <\/p>\n\n\n\n

              If you\u2019re underwriting \u201ccrypto infrastructure\u201d:<\/strong>
              The winning subset will be the part that can demonstrate measurable utility (settlement efficiency, cost reduction, new market structure) without leaning on hype. Policymakers are effectively saying: prove it.<\/p>\n\n\n\n

              Bottom line<\/h3>\n\n\n\n

              Neel Kashkari calling crypto \u201cutterly useless\u201d is not just a headline\u2014it\u2019s a reminder that legitimacy is still contested<\/strong> at the highest levels of U.S. economic policy. <\/p>\n\n\n\n

              Crypto markets can and do thrive in spite of skepticism. But if the industry wants durable institutional adoption, it has to win a different argument than \u201cnumber go up.\u201d It has to show why crypto rails materially improve payments, settlement, and financial access\u2014and<\/em> why doing so doesn\u2019t create new systemic risk.<\/p>\n\n\n\n

              Until that proof is broadly accepted, expect this tension\u2014between market enthusiasm and policy skepticism\u2014to remain one of the defining forces shaping Bitcoin and the broader crypto ecosystem.<\/p>\n","protected":false},"excerpt":{"rendered":"

              (HedgeCo.Net) When\u00a0Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said crypto has been around \u201cfor more than a decade\u201d and is\u00a0\u201cutterly useless,\u201d\u00a0he wasn\u2019t just tossing out a spicy soundbite. He was signaling\u2014plainly\u2014that a meaningful faction within the U.S. […]<\/p>\n","protected":false},"author":8,"featured_media":93129,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16282],"tags":[16285,16347,16312,16462,16572],"class_list":["post-93128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-bitcoin","tag-crypto-and-bitcoin","tag-crypto-and-coinbase","tag-crypto-and-stablecoins","tag-crypto-and-tokens"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/93128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=93128"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/93128\/revisions"}],"predecessor-version":[{"id":93130,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/93128\/revisions\/93130"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media\/93129"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=93128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=93128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=93128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}