Fed's Kashkari Says Blockchain 'Has More Potential' Than Bitcoin

The president of the Federal Reserve of Minneapolis took aim at bitcoin today, criticizing the ease at which new cryptocurrencies can be created.

AccessTimeIconMay 9, 2017 at 6:15 p.m. UTC
Updated Sep 11, 2021 at 1:18 p.m. UTC
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The president of the Federal Reserve of Minneapolis took aim at bitcoin today, criticizing the ease at which new cryptocurrencies can be created.

Neel Kashkari, a former Bush administration official who became president of the Minneapolis Fed in early 2016, gave a speech during the MN High Tech Association 2017 Spring Conference, held this afternoon.

Asked by an attendee about the Fed's position on digital currencies, Kashkari went on to make the following points:

  • The Fed is watching: "This is a topic a lot of people across the Fed are paying attention to and watching how it evolves."
  • His issue is with 'inflation by altcoin': "The problem I have [with bitcoin] is while it says, by design, you're limiting the number of bitcoins that can be created, it doesn’t stop me from creating NeelCoin or somebody from creating Bobcoin or Marycoin or Susiecoin."
  • Blockchain 'has more potential': "I would say the conventional wisdom now is that blockchain, the underlying technology, is probably more interesting and has more potential than maybe bitcoin does by itself."
  • The waiting game continues: "I think it's too early to know where this is going to go ... we'll see – we have a lot to learn."

His comments represent the latest remarks out of the Federal Reserve about digital currencies and blockchain, coming months after the Federal Reserve published its first major research findings on the tech.

Nor is he the latest Fed official to comment on blockchain. In January, Federal Reserve chair Janet Yellen called blockchain an "important technology" during an event appearance.

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