Minneapolis Fed President Kashkari Taunts CBDC: ‘Handwaving Word Salad’

Neel Kashkari, president of the Minneapolis Federal Reserve Bank, participates in an impromptu chat at the Minnesota Transportation Conference & Expo on May 15. spoke He gave a blunt assessment of central bank digital currencies (CBDCs) during a Q&A following his presentation, mostly about cryptocurrency and blockchain-related topics.

Kashkari said of the CBDC, “We are studying it.”

“Whether it’s bitcoin or a digital currency, no one has been able to articulate exactly what problem it’s solving. (…) I can send $5 to anyone in this room right now using Venmo.” (…) So what is it that a central bank digital currency can do that Venmo can’t?

“It’s just a bunch of hand-wringing word salad, maybe it’s better. (…) But there’s no evidence that it’s better,” he continued.

Kashkari rhetorically asked why China might be motivated to introduce its CBDC and replied, “In theory, a government could monitor every single transaction you have with a central bank digital currency.” He said, however:

“We at the Federal Reserve would not be in favor of that.”

Kashkari had other loopholes to suggest. The government can impose negative interest on an account. “You can’t do that at Venmo and we don’t want to do that at the Federal Reserve,” he said. He added that a CBDC would also facilitate direct taxation of an account.

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Kashkari addressed the questioner, saying, “I share a lot of your privacy concerns.” “We have no interest in violating the privacy of the American people at the Federal Reserve.”

Every time Kashkari becomes like this, there is a slight crisis of trust… $PACW $frc $wall $jpm $bac pic.twitter.com/6ZJO4gBWf4

– Special Situations Research Newsletter (J) (@SpecialSitsNews) May 8, 2023

Kashkari said, “I have developed a deep skepticism at this point.” “But I’m going to keep my mind open and see what the studies come up with.”

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