Minneapolis Fed's Kashkari: "Crypto Is Completely Useless" — The Power Struggle Behind the Fed's Internal Split

Why it matters: Kashkari, President of the Minneapolis Fed and a 2026 FOMC voter, dismissed cryptocurrencies as "utterly useless" and stablecoins as "buzzword salad." However, within the same Fed, Governor Waller welcomes a "new era of crypto assets," and the Trump administration has already institutionalized the $310 billion stablecoin market with the GENIUS Act. This statement is not just a personal opinion, but an expression of the power struggle over the central bank's monetary sovereignty, and a moment when the "enemies within the system" of crypto assets are visualized.

📝 Summary: Kashkari, President of the Minneapolis Fed and a 2026 FOMC voter, dismissed cryptocurrencies as "utterly useless" and stablecoins as "buzzword salad."

What Happened

• Kashkari's Remarks — On February 19, 2026, Minneapolis Fed President Neel Kashkari stated at the Midwest Economic Outlook Summit in Fargo, North Dakota, that crypto assets are "utterly useless" after more than 10 years of existence. He also dismissed stablecoins as "buzzword salad" and argued that they have no advantage over existing payment services such as Venmo. He asked for a show of hands from "people who have used ChatGPT" and "people who have bought and sold with Bitcoin" at the venue, contrasting the practicality of AI with the uselessness of crypto assets.
• Division within the FRB — On the other hand, FRB Governor Christopher Waller stated that "distributed ledgers and crypto assets are no longer on the periphery, but are woven into the payment and financial system," and declared that the FRB will play an "active role" in the crypto asset revolution. It is an abnormal situation that completely different views on crypto assets are openly expressed within the same central bank.
• Reality of the Stablecoin Market — The stablecoin market, which Kashkari dismissed as "useless," has reached a market capitalization of $310 billion. The amount of stablecoin transfers in 2024 was $27.6 trillion, 7.7% higher than the total of Visa and Mastercard. A federal regulatory framework has already been established by the GENIUS Act (effective July 2025). Zelle has begun introducing stablecoins for international remittances, and five crypto asset native companies have obtained national trust bank licenses.

The Big Picture

Historical Context

The conflict between central banks and emerging currency technologies is a historically recurring pattern. To understand its structure, it is necessary to look at three precedents.

In the late 1990s, at the dawn of Internet payments, the Fed expressed concern that "electronic money would make it difficult to control the money supply." PayPal founder Peter Thiel declared, "We are going to end the government's monopoly on currency," but as a result, PayPal was incorporated into the existing financial regulatory system, and the "power within the system" of regulators prevailed.

In 2019, when Facebook announced "Libra" (later Diem), central banks around the world, including the Fed, immediately opposed it. Chairman Powell himself expressed "serious concerns" about Libra, and a series of congressional hearings were held. Diem was eventually forced to sell its assets in 2022. This is the most direct example of a central bank crushing an emerging currency technology with political pressure.

However, the structure fundamentally changed in 2024-2025. With the approval of the spot BTC ETF (January 2024), the enactment of the GENIUS Act (July 2025), and the executive order for strategic Bitcoin reserves (March 2025), crypto assets have transitioned from "unregulated challengers" to "legally recognized parts of the financial system." Kashkari's remarks would have been mainstream common sense 10 years ago, but as of February 2026, they are positioned closer to a "personal objection to a market that has been institutionalized."

It is also worth noting that Kashkari is a 2026 FOMC voting member. He was reappointed in December 2025 despite pressure from the Trump administration. He is also a symbol of the Fed's independence. His criticism of crypto assets needs to be read in the context of his monetary policy views and defense of the central bank's authority.

Stakeholder Map

By the Numbers

• $310 Billion — Total market capitalization of stablecoins in early 2026. 49% growth from $205 billion in early 2025. The actual size of the market that Kashkari calls "useless."
• $27.6 Trillion — Total stablecoin transfer amount in 2024. 7.7% higher than the total of Visa and Mastercard, contradicting Kashkari's "no advantage" theory in comparison with existing payment infrastructure.
• 2.5% → 5% — Stablecoin transfer fee (2.5%) vs. traditional bank transfer fee (5%). Recipients achieve an average cost reduction of 40%, proving its practicality, especially in emerging countries.
• 56% — Percentage of current stablecoin holders who indicated that they intend to increase their holdings in the next 12 months. In Africa, 79% answered that they currently have or have recently had experience holding.
• 500 Million — Number of global stablecoin wallet addresses. More than 25,000 stores are accepting it for online payments.
• 2026 FOMC Voting Rights — Kashkari is a 2026 FOMC voting member. Along with Logan of Dallas and Hammack of Cleveland, it is the year in which three "hawks" have voting rights.
• $133.4 Billion — $133.4 million in funds flowed out of the BTC spot ETF per day as of February 18. The BTC price has fallen by about 50% from its October high to around $67,000.

Between the Lines — What Reports Don't Say

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#Narrative War × #Institutional Decay

Kashkari's criticism of crypto assets is the last line of defense for the central bank to defend its monetary sovereignty, and at the same time, it visualizes the "Institutional Decay" that the more crypto assets are institutionalized, the more divided the pros and cons within the central bank become.

Narrative War: Why must central bankers say that crypto assets are "useless"?

Kashkari's remarks are not a personal preference. It is an institutional defense reaction to the threat to the very raison d'être of the central bank, which manages the money supply and controls the transmission path of monetary policy.

To understand the structural reasons why Kashkari dismisses crypto assets as "utterly useless," it is necessary to stand in the "worldview" of central bankers.

The FRB's monetary policy permeates the economy through the "banking channel." When the FRB changes the FF rate, the lending rates of banks change, affecting corporate investment and consumer spending. The premise of this mechanism is that almost all economic activity goes through the banking system. The market capitalization of stablecoins of $310 billion is only about 1.5% of the US M2 money supply (approximately $21 trillion), but the total transfer amount of $27.6 trillion exceeds Visa and Mastercard. In other words, in the realm of "flow" rather than "balance," stablecoins have already reached a scale equal to or greater than existing financial infrastructure.

This "erosion of flow" is the essential concern of central bankers. If a significant portion of economic transactions were to take place outside the banking system via stablecoins, the FRB's monetary policy transmission mechanism would be weakened. Kashkari's point that "the main use is to avoid KYC and AML regulations" is a reference to the risk that crypto assets allow funds to escape outside the regulatory system.

However, there is a time lag in this argument. The GENIUS Act (effective July 2025) requires stablecoin issuers to comply with KYC, AML, and real-time transaction monitoring. Tether introduced "USA₮" issued by a US law-chartered bank in January 2026 to comply with the GENIUS Act. Kashkari's "regulatory avoidance" criticism applied to stablecoins before the GENIUS Act, but is weakly based in the regulatory environment after the GENIUS Act.

It is also suggestive that Kashkari brought up the comparison with AI. He stated that "AI can contribute trillions of dollars to GDP." McKinsey estimates that generative AI could create $2.6-4.4 trillion in economic value annually. On the other hand, the direct GDP contribution of crypto assets is difficult to measure. This framing shifts the focus from the "efficiency of stablecoins as payment infrastructure" by using "contribution to the real economy" as a standard. Saying that stablecoins are "meaningless" compared to Venmo is an argument that only cuts out personal remittances within the United States, ignoring the 40% cost reduction in international remittances and the reality of 500 million global wallet addresses.

Institutional Decay: The more crypto assets are institutionalized, the more the central bank splits from within

In the same institution where Governor Waller welcomes the "new era of crypto assets," Kashkari dismisses them as "utterly useless." This division is a direct expression of the paradox created by the institutionalization of crypto assets.

Before 2024, the FRB's stance on crypto assets was relatively unified——"observe carefully, but do not actively participate." However, as crypto assets have become institutionalized, a clear division between "acceptance faction" and "resistance faction" has emerged within the FRB.

Governor Waller, the leader of the acceptance faction, admitted that "distributed ledgers and crypto assets are no longer on the periphery" and indicated his intention to open the FRB's payment system to DeFi companies. The policy of providing FRB master accounts to crypto asset-related companies by Q4 2026 effectively means integrating crypto asset companies into the FRB's payment infrastructure. This integration is already underway with Circle, Paxos, Ripple, BitGo, and Fidelity Digital Assets having obtained national trust bank licenses.

On the other hand, the logic of the resistance faction represented by Kashkari is rooted in "defending the raison d'être of the central bank." He compared crypto assets to "Beanie Babies" in a CNN interview in November 2025, but his statement in February 2026 that they are "utterly useless" has escalated further. This rhetorical intensification is the reverse side of the sense of crisis over the progress of institutionalization.

This paradox is most sharply expressed in the realm of stablecoins. In the era when stablecoins were "unregulated rebels," the FRB could oppose them monolithically. However, now that stablecoins have come under federal regulation with the GENIUS Act, KYC/AML obligations have been imposed, and 1-to-1 backing of reserves has been legislated, stablecoins have become "regulated financial products." The fact that Zelle has begun to adopt stablecoins for international remittances is proof that the traditional banking system itself recognizes stablecoins as "useful."

There are two interpretations of Kashkari continuing to say "useless" in this situation. First, the function as an "institutional canary" that embodies the independence of the FRB. He is demonstrating the FRB's political independence by asserting the central bank's unique perspective against the Trump administration's promotion of crypto assets. In fact, he was reappointed in December 2025 despite pressure from the Trump administration. Second, a "preemptive strike" to protect the effectiveness of monetary policy. By attacking the legitimacy of stablecoins before they weaken the transmission path of monetary policy, he is trying to put a brake on Congress and public opinion.

Senator Elizabeth Warren's request to FRB Chairman Powell and Treasury Secretary Bessen on February 18, 2026, for a commitment not to use taxpayer funds for crypto asset bailouts shows that Kashkari's "useless" theory has sympathizers not only within the FRB but also in Congress. With the BTC price down 50% from its October high to around $67,000, Trump and his family's crypto asset company, World Liberty Financial, is facing allegations of conflicts of interest. Kashkari's criticism is resonating and amplified in this political context.

Dynamics Intersection

The dynamics of "Narrative War" and "Institutional Decay" change depending on the maturity of crypto assets. In the