The president of the Minneapolis Federal Reserve Bank has opined that blockchain, not bitcoin, has more potential for adoption in the future. The central banker also took aim at bitcoin and other digital currencies.
Neel Kashkari, an American banker and politician who is also the president and CEO of the Federal Reserve Bank of Minneapolis was speaking at the Minnesota High Tech Association’s Spring Conference when he was asked about digital currencies by an audience member.
“From the Fed Reserve point of view, where do you see the [digital currencies] movement going? Are we going to embrace bitcoin or blockchain?”
In response, Kashkari first responded in stating that the Federal Reserve is keeping a keen eye on developments in the space.
This is a topic that a lot of people across the Fed are paying a lot of attention and watching how it evolves. I think the sentiment has shifted in the markets, in the Fed. I would say I think conventional wisdom now is that blockchain and the underlying technology is probably more interesting and has more potential than maybe bitcoin does by itself.
Shifting the focus to bitcoin, he prefaced his thoughts in stating: “This is going to trigger a tweetstorm of haters.”
Laying out his criticism, he stated:
The problem I have with bitcoin is while it says by design that you’re limiting the number of bitcoins that can be created, it doesn’t stop me from creating Neelcoin, or somebody from creating Bobcoin or Marycoin or Susiecoin.
I haven’t heard of a digital currency solution for a proliferation of competing virtual currencies. That to me is a fundamental question I have about bitcoin or other virtual currencies and their risk for inflation, just because of competition.
The US federal reserve published its first research paper on blockchain technology in December 2016, one which deduced that the “use of banks to conduct payments could become obsolete.”
Meanwhile, Kashkari is also likely to have heard about bitcoin during the 2016 Federal Reserve Annual Meeting in Washington last May. The event, hosted by the Federal Reserve, the World Bank and the International Monetary Fund (IMF), had Federal Reserve chair Janet Yellen urging her counterparts to study emerging technologies, specifically mentioning bitcoin and blockchain technology.
Featured image from Neel Kashkari for Governor/Flickr.