The president of the Federal Reserve Bank of Minneapolis accused the cryptocurrency market of unregulated chaos and dominance of fraudsters and called the industry a "farce".

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, speaking at Bay College in Michigan, expressed concern about the growing number of frauds in the emerging cryptocurrency industry.

"It's a clever idea that some people came up with, I don't know, six or eight years ago, but now it's being taken to ridiculous extremes. So if you go back in American history, there was a time when every state and different banks issued their own currency, and then you had runaway inflation, because people just got confused," Kashkari said.


He explained that he speaks about cases when scammers easily can deceive the community in words, only stating that they allegedly launched a certain product.

"The barrier to entry to creating a new cryptocurrency is zero. You could go create one basically, and if you can dupe enough people to buy it, you can pretend that you've launched something. You can say: look I'm a billionaire because I sold you one, and I own the other 999 million of them, so that means I'm a billionaire. It's become a farce."

Kashkari added that his skepticism does not mean that he does not see any future for cryptocurrencies at all, but most of the coins, in his opinion, will disappear, while only the strongest will survive.

"Does that mean that's always going to be a farce? No, there'll probably be a shakeout, and maybe a handful of these things will end up surviving and, who knows, what the future holds. But right now I'm seeing more noise and more fraud than I'm seeing anything useful. You know we'll see what happens in the next ten or twenty years."

Earlier Kashkari noted that bitcoin lacks confidence to compete with the US dollar.