Coin World reported:
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, once again criticized cryptocurrency, claiming that legitimate transactions are rare.
According to him, the main reason why most people get involved with cryptocurrency is for illegal purposes such as drugs. “People are buying and selling cryptocurrency,” he said, “but they are not using it legitimately to pay for things.”
He claimed that cryptocurrency is hardly seen in any action unless it involves drugs or illegal items. Kashkari has long been a critic of cryptocurrency.
He has been vocal about his belief that the entire industry is filled with hype, scams, and fraud. His comments can be traced back to at least 2022 when he likened Bitcoin to a speculative frenzy and compared it to Beanie Babies.
At the time, he criticized Bitcoin for lacking real value and pointed out that it is primarily used for speculation.
Cryptocurrency crime decreases
Meanwhile, data shows that the value of cryptocurrency sent to illegal addresses decreased from $39.6 billion in 2022 to $24.2 billion in 2023.
But even with the decrease, the illicit portion of the market in 2023 still accounts for 0.34% of total transaction volume, compared to 0.42% the previous year.
Stablecoins, particularly Tether (USDT), have become the preferred tool for criminals. Bitcoin was the original star of cryptocurrency, but due to its stability, it is being replaced by these stablecoins.
Criminals prefer something with less price volatility when transferring funds. In 2023, stablecoins became the center of illegal activities in the cryptocurrency field, surpassing Bitcoin.
However, ransomware and darknet markets continue to thrive. In 2023, ransomware attacks attracted approximately $1.1 billion in cryptocurrency payments.
At the same time, sales on darknet markets for purchasing drugs and other illegal items amounted to around $1.6 billion.
Kashkari on Fed rate cuts
While Kashkari’s harsh views on cryptocurrency have not changed, he also discussed other issues in his speech in Wisconsin.
He talked about the Federal Reserve’s interest rate cuts, stating that he supported the larger rate cut last month compared to usual, but expects smaller cuts in the future.
Kashkari said, “Currently, I predict there will be some more moderate cuts in the coming quarters.” Last month, the Federal Reserve cut interest rates by 0.5 percentage points for the first time since the outbreak of the pandemic.
Kashkari believes that future cuts will be more moderate unless there is clear evidence that the labor market is collapsing.
So far, data shows that hiring has been stronger than expected, and inflation in September was worse than anticipated. Therefore, the market expects the Federal Reserve to cut rates by another 25 basis points at the next meeting in November.
