Crypto is like ESG with no real impact on financial industry — Minneapolis Fed's Kashkari

[Federal Reserve Bank of Minneapolis / Marquette Plaza building]
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Crypto is like ESG for libertarians, and its impact on the financial industry will be nothing, according to Minneapolis Federal Reserve Bank President Neel Kashkari.

Kashkari was speaking at a fireside chat before the 2026 InvestUP CEO Summit.

"It was like millennials and Gen Z wanted to feel good about their investing, so Wall Street rolled out all these ESG products, and they charged premium fees for them, and the millennials and the Gen Zs felt good about their investments," remarked Kashkari. "The banks felt good because they're getting premium fees. Meanwhile, they did nothing for the environment."

"That's basically what crypto is. It's been a dozen years now. Nobody's found any actual use case in any advanced economy for it, other than circumventing banking regulations. But people like the idea that they're circumventing the regulated system, and so Wall Street's happy to give them products," he noted.

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Comparatively, he said, people are finding use cases for AI every day. However, crypto is just marketing.

The Minneapolis Fed president is very bullish on AI. "Every big business that I talked to, every single one, is using it, finding new ways of either doing things they couldn't do or doing things more efficiently than they used to do."

"My guess is it's going to take a lot longer to have the full, the full benefits of this technology," he said. "So, I think it's real."

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Kashkari had supported [https://seekingalpha.com/news/4583903-kashkari-explains-his-dissent-at-fomc-meeting-over-easing-bias] the Federal Open Market Committee's decision to hold the federal funds rate at the meeting. But, given the uncertainty over the Iran war's duration, he didn't think it was appropriate for the committee's statement to retain the phrase "In considering the extent and timing of additional adjustments to the target range for the federal funds rate…"

If the Strait of Hormuz is closed for an extended period of time, it may well be that the next move may be a need to raise interest rates," he said at the 2026 InvestUP CEO Summit.

"Inflation is a tax on all of us, and so we want to keep inflation low," he noted.

He said they were three to six months late in raising interest rates again during COVID. However, he also pointed out that it probably wouldn't have made very much of a difference if they had moved a bit sooner. "If you look around the world, where their central banks moved three to six months sooner, they had almost the exact same inflation outcomes that we had."

When asked what tools the Fed has to control inflation, Kashkari answered the federal funds rate, forward guidance, and the balance sheet.

On the Fed independence, the president said, "I feel pretty good about where we are." He noted that the courts have seemed to say that Fed independence is important through the ongoing cases.

Kashkari noted that Fed Chair Jerome Powell has articulated that he plans to remain as a governor for some time just to make sure that independence is protected.

"The louder the political noise gets, the more we just hug the mass of data and analysis and objectivity," he said. "We're all human, none of us are perfect, but I think overall we do a pretty good job of that."

MORE ON KASHKARI

* Fed’s Kashkari warns Iran war clouds rate outlook, while Bessent sees oil relief [https://seekingalpha.com/news/4584484-fed-s-kashkari-warns-iran-war-clouds-rate-outlook-while-bessent-sees-oil-relief]
* Kashkari explains his dissent at FOMC meeting over 'easing bias' [https://seekingalpha.com/news/4583903-kashkari-explains-his-dissent-at-fomc-meeting-over-easing-bias]