Fed's Kashkari Says Almost No One Uses Crypto for Payments

During a recent event in Wisconsin, Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, stated that crypto is used for "very few" transactions. 

"People are buying and selling crypto, but they are not paying for goods and services. It almost never happens, unless people are buying drugs or other illegal activities," Kashkari said. 

The Fed official has long been a staunch critic of cryptocurrencies. As reported by U.Today, he stated that the industry was mainly comprised of "fraud, hype, and noise" back in 2022. Earlier this year, he questioned Bitcoin's utility, arguing that it cannot function as either a currency or an investment. He previously dismissed the largest cryptocurrency as a tool for speculation that is similar to Beanie Babies. 

Even though Bitcoin was initially supposed to act as "digital cash," its proponents later came up with the "digital gold" narrative after the flagship cryptocurrency failed to gain substantial traction with merchants. 

That said, cryptocurrency analyst Adam Cochran, who has become an influential voice within the community, believes that the significance of cryptocurrency payments is actually underestimated. He has described Kashkari's comments as "daft and shortsighted." 

Cochran pointed to the fact that payment giant Stripe had forked out a whopping $1.1 billion in order to acquire stablecoin startup Bridge. The acquisition is the biggest cryptocurrency deal to date. 

As noted by Cochran, stablecoin payments are one of the main use cases for blockchain technology since they are capable of removing manipulative middlemen and allowing for low-cost remittance while also strengthening the dominance of the US dollar.