Kashkari of the Federal Reserve States Rarely Any Transactions Occur on Cryptocurrencies Except for Illegal Activities

CoinWorld reported:
Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, once again criticized cryptocurrencies, claiming that legitimate transactions are rare.
According to him, the only reason why most people get involved with cryptocurrencies is for illegal purposes such as drugs. “People are buying and selling cryptocurrencies,” he said, but they are not using it legitimately to pay for things.
He claims that there is hardly any activity in cryptocurrencies unless it involves drugs or illegal goods. Kashkari has long been a critic of cryptocurrencies.
He has consistently stated that he believes the entire industry is filled with hype, scams, and fraud. His comments can be traced back to at least 2022, when he likened Bitcoin to a speculative frenzy and compared it to Beanie Babies.
At that time, he criticized Bitcoin for having no real value, pointing out that it was mainly used for speculation.
Cryptocurrency crime decreases
Meanwhile, data shows that the value of cryptocurrencies sent to illegal addresses decreased from $39.6 billion in 2022 to $24.2 billion in 2023.
But even with the decline, the illegal portion of the market in 2023 still accounted for 0.34% of total transaction volume, compared to 0.42% the previous year.
Stablecoins, especially Tether (USDT), have become the preferred tool for criminals. While Bitcoin was the initial star of cryptocurrencies, it is giving way to these stablecoins due to their stability.
Criminals prefer something that does not experience drastic price fluctuations when transferring funds. In 2023, stablecoins became the center of illegal activities in the cryptocurrency field, replacing Bitcoin.
However, ransomware and dark web markets are still thriving. In 2023, ransomware attacks attracted around $1.1 billion in cryptocurrency payments.
Meanwhile, sales on dark web markets for drugs and other illegal goods amounted to approximately $1.6 billion.
Kashkari on Fed rate cuts
Although Kashkari’s harsh views on cryptocurrencies have not changed, he also discussed other issues in his speech in Wisconsin.
He talked about the Federal Reserve’s rate cuts, stating that he supported a larger rate cut last month than usual, but expects smaller cuts in the future.
Kashkari said, “Right now, I anticipate some more modest cuts in the next few quarters.” Last month, the Federal Reserve cut rates by 0.5 percentage points for the first time since the outbreak of the pandemic.
Kashkari believes that future cuts will be more moderate unless there is clear evidence that the labor market is collapsing.
So far, data shows that hiring has been stronger than expected and inflation in September was worse than anticipated. Therefore, the market expects the Federal Reserve to cut rates by another 25 basis points at its next meeting in November.