The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, has come under fire for claiming that cryptocurrencies are almost exclusively used for buying drugs and other illegal activities. Despite evidence to the contrary, Kashkari once again took a harsh stance against #Cryptocurrencies .

Criticism of Cryptocurrencies at Public Event

During a public event in Wisconsin organized by the Chippewa Falls Area Chamber of Commerce, Kashkari stated that transactions using cryptocurrencies are very rare. He added:

"People don't pay for goods and services with cryptocurrencies [...] It almost never happens unless they're buying drugs or engaging in other illegal activities."

This comment, echoing similar claims made by other government crypto-skeptics, sparked criticism on X (formerly Twitter).

Source: Nic Carter

Reactions from Crypto Experts

Nic Carter, partner at Castle Island Ventures, responded on X, saying, "Being this wrong should be illegal." He emphasized that Kashkari’s comments are especially concerning given that he is considered one of the ten most important financial regulators in the world.

Hailey Lennon, a partner at Brown Rudnick, also criticized Kashkari's uninformed statements about the use of cryptocurrencies. In her October 22 post, she said:

"Legitimate crypto projects have cutting-edge anti-money laundering policies. Cash is still the preferred method for drug deals and illegal activities."

Crypto Skepticism vs. Reality

Kashkari has long been a bitcoin skeptic, and his recent comments are in line with similar sentiments expressed by politicians like Senator Elizabeth Warren and Congressman Brad Sherman.

However, blockchain data reveals that Kashkari is mistaken. According to a report from Chainalysis on January 18, 2023, only 0.34% of all crypto transactions in 2023 were linked to illegal activities.

In 2019, illegal crypto transactions peaked at just 1.29%, the highest level in the past six years.

Illicit transactions as a share of total crypto transactions have only ever been as high as 1.29% since 2018. Source: Chainalysis

Proposals to Ban Cryptocurrencies?

Kashkari's comments came just one day after the Federal Reserve Bank of Minneapolis suggested that assets like bitcoin should either be taxed or banned, claiming this would help governments address budget deficits.

Previously, Kashkari stated that crypto assets and central bank digital currencies (CBDCs) were "worthless" and argued that they do nothing more than modern payment apps like Venmo.

In 2020, he even compared bitcoin and the crypto market to "a giant dumpster" and labeled dogecoin as nothing more than a Ponzi scheme.

#BTC☀ , #socialmedia , #FederalReserve , #cryptoregulation


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