In a scathing critique at the 2026 Midwest Economic Outlook summit, Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, delivered a pointed rebuke of the crypto industry while heralding the transformative potential of artificial intelligence (AI).
“Crypto has been around for more than a decade, and it’s utterly useless,” Kashkari declared. “AI, on the other hand, has not been around very long, and people are using it every day. This is demonstrating to me that this thing is real and it has real long-term potential for the US economy as opposed to crypto,” he added.
Why Crypto Falls Short
Kashkari’s criticism of crypto was multifaceted, focusing on the industry’s failure to provide practical solutions compared to existing financial technologies. He questioned the utility of stablecoins, which are designed to maintain a stable value by being pegged to traditional currencies.
“I always ask people: What can I do with the stablecoin that I can’t do with Venmo today? I could send any one of you $5 with Venmo, or PayPal, or Zelle, so what is it that this magical stablecoin can do? Then I get a buzzword salad answer, blah blah blah, tokenized deposits,”
Kashkari’s skepticism extends to the use of stablecoins for international remittances, a common argument made by crypto enthusiasts. He pointed out that while stablecoins can be transferred quickly, the recipient often faces additional fees when converting them into local currencies, negating any supposed efficiency gains.
The AI Revolution
In contrast, Kashkari praised AI for its rapid adoption and tangible benefits. He highlighted how AI is already being integrated into various sectors, from finance to healthcare, and emphasized its potential to drive economic growth and innovation.
“AI has the capability to transform industries in ways that we are only beginning to understand,” he said. “The potential for AI to enhance productivity, reduce costs, and create new opportunities is immense.”
Practicality and Regulation
Kashkari’s remarks also touched on the regulatory challenges facing both crypto and AI. While he acknowledged the need for careful oversight, he stressed that regulation should focus on ensuring the practicality and security of financial technologies.
“When it comes to anything about crypto or stablecoins, ask the most basic questions and don’t settle for word salad nonsense answers,” he advised. “We need to ensure that any new technology is actually solving real problems and not just creating new ones.”
Looking Forward
As the tech landscape continues to evolve, Kashkari’s comments underscore the growing divide between the perceived value of crypto and the practical applications of AI. While crypto faces ongoing scrutiny and regulatory hurdles, AI is poised to play a pivotal role in shaping the future of the economy. The coming years will likely see increased investment and innovation in AI, further solidifying its position as a cornerstone of modern technology.
In the end, Kashkari’s critique serves as a reminder that the true value of any technology lies in its ability to address real-world challenges and improve people’s lives. As the tech industry moves forward, the focus on practicality and utility will be more critical than ever.
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