Neel Kashkari, President of the Federal Reserve Bank of Minneapolis and notable critic of cryptocurrencies, recently indicated that he is open to reconsidering his position, stating that he will listen to arguments that could change his perspective.
The election of Donald Trump, who promised increased support for the crypto industry and plans to remove Gary Gensler, Chairman of the SEC, could influence Kashkari’s position and compel the Fed to reconsider its approach to digital assets.
These developments raise questions about the future of Fed officials under the Trump administration, with Jerome Powell refusing to resign and Kashkari potentially needing to reevaluate his stance on evolving crypto regulation.
From Virulent Criticism to Measured Openness
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, is known for his scathing criticisms of the crypto industry. He has not hesitated to label the sector as “worthless,” “fraudulent,” and “absurd.” However, in a recent discussion with CoinDesk, he hinted at a change in perspective, stating that he remains open to arguments that could alter his view of cryptocurrencies. This stance marks a notable evolution, albeit still tinged with skepticism.
Questions about the Real Utility of Crypto
Aside from being a speculative asset, what is its concrete usefulness in the economy?
Despite this apparent openness, Kashkari remains skeptical about the practical applications of cryptocurrencies. According to the former banker, the industry has failed to make significant inroads into the real economy, even after more than a decade of existence, reminding that the initial promise of crypto to revolutionize financial transactions has not been fulfilled.
The President of the Minneapolis Fed highlights the crypto’s inability to go beyond the status of an investment asset, struggling to connect with the traditional financial system. This failure, in his view, is partly explained by the fierce resistance of the US government, and specifically by the regulatory role of institutions like the Fed.
The Arrival of Trump in Power Quiets Kashkari’s Ardor
The recent election of Donald Trump, however, could change the dynamics. The new President has promised increased support for the crypto industry and has pledged to dismiss Gary Gensler, Chairman of the Securities and Exchange Commission, seen as a major obstacle by industry players. The Trump administration may even consider weakening the influence of the Fed, an idea that seems to appeal to some of his close allies, including Elon Musk, a staunch advocate for cryptocurrencies, particularly DOGE.
And today, Neel Kashkari affirms that his point of view could be called into question:
I will keep an open mind.
These developments raise questions about the future of Fed officials under the Trump administration. Jerome Powell, the current Chairman of the Federal Reserve, has already stated that he does not intend to resign even under the pressure of a President determined to disrupt the balance of power. As for Kashkari, he may need to reassess his position in an increasingly crypto-friendly context.
While Kashkari claims to be open to listening, his lingering doubts illustrate a deep-rooted critical viewpoint. Trump’s promise to support crypto and shake up regulation could pose new challenges for the Fed and force discussions on the integration of cryptocurrencies into the financial system. In this evolving context, the stance of Kashkari and his counterparts will be closely scrutinized, as it could influence the future of financial regulation in the United States.
