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President of the Minneapolis Federal Reserve Bank, Neel Kashkari, participated in a fireside chat at the Minnesota Transportation Conference and Expo on May 15. While he spoke mostly about topics unrelated to cryptocurrency and blockchain, he gave a blunt assessment of central bank digital currencies (CBDCs) during the Q&A after his presentation.<\/p>\n
\u201cWe\u2019re studying it,\u201d Kashkari said of CBDCs, adding that the Fed believes it would take an act of Congress to allow it to issue its own digital currency:<\/p>\n
\u201cWhether it\u2019s Bitcoin or digital currency, nobody has been able to articulate what problem it is actually solving. [\u2026] I can send anybody in this room $5 right now using Venmo. [\u2026] So what is it that a central bank digital currency can do that Venmo can\u2019t do?\u201d<\/p><\/blockquote>\n
\u201cIt\u2019s just a bunch of handwaving word salad about maybe it\u2019s better. [\u2026] But there\u2019s no evidence that it is better,\u201d he continued.<\/p>\n
Kashkari asked rhetorically why China may have been motivated to introduce its CBDC and answered, \u201cIn theory, a government could monitor every one of your transactions with a central bank digital currency.\u201d He said, however:<\/p>\n
\u201cWe would not be in favor of that at the Federal Reserve.\u201d<\/p><\/blockquote>\n
Kashkari had more drawbacks to suggest. The government could impose negative interest on an account. \u201cYou can\u2019t do that at Venmo and we don\u2019t want to do that at the Federal Reserve,\u201d he said. A CBDC would also facilitate direct taxation of an account, he added. <\/p>\n
Related: RFK Jr. elaborates position on CBDC, crypto: \u2018It isn\u2019t just criminals who want privacy\u2019<\/em><\/strong><\/p>\n
\u201cI share a lot of your privacy concerns,\u201d Kashkari said, addressing the person who asked the question. \u201cWe have no interest in violating the American people\u2019s privacies at the Federal Reserve.\u201d <\/p>\n
\nKashkari gets this way every time there is a slight crisis of confidence\u2026 $PACW<\/a> $FRC<\/a> $WAL<\/a> $JPM<\/a> $BAC<\/a> pic.twitter.com\/6ZJO4gBWf4<\/a><\/p>\n
\u2014 Special Situations Research Newsletter (Jay) (@SpecialSitsNews) May 8, 2023<\/a><\/p><\/blockquote>\n
\u201cI\u2019ve developed a deep skepticism at this point,\u201d Kashkari said. \u201cBut I\u2019m going to keep my mind open and see what the studies come up with.\u201d<\/p>\n
Magazine: Are CBDCs kryptonite for crypto?<\/em><\/strong><\/p>\n
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