The ‘Utterly Useless’ Asset? Why the Fed’s Kashkari is Declaring War on Digital Currency

The president of the Federal Reserve Bank of Minneapolis posed a straightforward question to the audience on a Thursday in February in a conference room in Fargo, North Dakota. He inquired as to how many of them had utilized ChatGPT or Gemini, two AI tools, during the previous week. Many hands were raised. He then inquired as to how many had used Bitcoin to purchase or sell goods. There was silence in the room.

Neel Kashkari’s entire cryptocurrency argument is condensed into a public moment in that two-question demonstration. For years, he has made the same argument in various settings using slightly different language, but the Fargo version landed in a setting that is more difficult to ignore than it might have been eighteen months ago. Through the GENIUS Act, the Trump administration is promoting a regulated stablecoin framework, actively promoting Bitcoin as a strategic asset, and portraying digital currencies as instruments for expanding American financial dominance internationally. Stablecoins are being referred to as “buzzword salad” and cryptocurrency as “utterly useless” by one of the Federal Reserve’s more well-known voices. This divergence is not an insignificant detail. The question of what money should be and who should be in charge of it is a real institutional conflict.

This is something that Kashkari has been saying since at least 2020, when he called the cryptocurrency market a “giant garbage dumpster.” In 2021, he increased the estimate to “95% fraud.” Speaking on CNN in November of last year, he likened the trajectory of the entire industry to the Beanie Babies bubble of the 1990s, a phenomenon that created a great deal of excitement, real prices, and eventually came to represent irrational enthusiasm. The crypto community has responded predictably to every escalation in his language: dismissal, charges of being a legacy finance defender, and claims that he doesn’t comprehend what he’s criticizing. In 2026, however, his criticism comes at a time when the industry was anticipating something more akin to confirmation.

Kashkari becomes the most detailed and critical in the stablecoin debate. He asked the question that proponents of stablecoin have never satisfactorily addressed when the conversation at the Fargo event shifted to payments: “I can send any one of you $5 with Venmo or PayPal or Zelle.” What can this enchanted stablecoin accomplish, then? Kashkari acknowledged the existence of the argument but persisted when supporters challenged cross-border payments, claiming that stablecoins enable quicker, less expensive international transfers. He pointed out that even if the transfer is quicker, the recipient must still exchange the stablecoin for local currency in order to pay for groceries, rent, or engage in any other physical economy activity. In most of the markets where the pitch is supposed to make the most sense, that conversion is still costly and logistically difficult. The use of a blockchain by the middle step does not solve the “last mile problem,” as it is sometimes referred to in payments.

The part of his argument that feels truly different from his previous criticisms is his contrast with AI. Kashkari’s earlier remarks about cryptocurrency were essentially dismissals; he stated that he believed it primarily facilitated financial crime and gambling. A comparative dimension that is more difficult to ignore is added in the 2026 version. AI tools are clearly and tangibly altering how people work, including how software is written, documents are drafted, and medical diagnoses are supported. The adoption curve is accelerating and steep. At Fargo, Kashkari specifically highlighted this difference, claiming that AI “has real long term potential for the U.S. economy” while cryptocurrency, even after over ten years, still finds it difficult to address the fundamental question of what regular people do with it. That isn’t an argument against technology based on ideology. It is an empirical argument concerning results.

It’s important to acknowledge that there is a valid counterargument. Adoption of Bitcoin is expanding in developing nations in ways that are not evident in a show of hands in a conference room in North Dakota. Genuine adoption of cryptocurrency as a medium of exchange or store of value has been observed in nations where currency devaluation is a reality rather than an abstract idea. Although Kashkari continues to apply the US consumer utility test, it has a limited scope. Additionally, testing consumer utility without first building the payment infrastructure is a somewhat circular argument because the US regulatory environment has been so hostile for so long.

However, the context in which Kashkari made these most recent comments is instructive. Fargo, North Dakota—not Washington, New York, or an academic conference hostile to cryptocurrency. He was discussing interest rates, inflation, and regional economic conditions with upper Midwest business executives. When someone asked, he brought up cryptocurrency, and he always gave the same response. This consistency, from a Fed president defending the institution’s independence against political pressure from the same administration endorsing Bitcoin to a former TARP administrator who has experienced financial crises, carries a different weight than the typical skepticism of legacy finance. It’s possible that Kashkari is just mistaken, believing that the game-changing cryptocurrency app is still on the horizon, that stablecoins will eventually live up to expectations, that this is the Napster era, and that Spotify will soon be available. It’s also possible that the question he keeps asking has been addressed over the course of ten years.