Neel Kashkari, President of the Minneapolis Federal Reserve, likened stablecoins to casino chips during a Bank of Korea event. The comparison was actually a practical one. He noted that despite claims to the contrary, the vast majority of stablecoin usage is for cryptocurrency transactions. Casinos go to the expense of issuing chips because if someone went to a poker or roulette table with cash, it would slow things down. Using chips makes it quicker. He said casinos “will take your (cash) bills and give you chips, one for one. It’s a perfect stablecoin.” That’s in part because the casino has to hold the equivalent in cash in its vault. He concluded that the speed motivation behind casino chips is “essentially the role a stablecoin plays in crypto trading.”
But the choice of terminology may have reflected his views that cryptocurrencies are speculative assets. He said that despite bitcoin being around for 17 years, it has failed for payments, adding that it also hasn’t been the promised inflation hedge. He questioned the utility of bitcoin and blockchain more broadly, with a caveat that his views do not represent the stance of the Federal Reserve. The Republican may or may not have been aware that former SEC Chair Gensler previously compared stablecoins to poker chips back in 2021.
As for other functions of stablecoins, he can’t see the point for domestic payments because Venmo works fine, or as a savings vehicle without yield, which is the subject of much current debate in the US. Where he does see potential is in illicit activities, cross border payments and AI agent microtransactions.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
