The Fed Just Called Crypto "Utterly Useless" — While Congress Fights Over Whether to Bail It Out

Thursday was a weird day for crypto's relationship with Washington. In one corner, a Federal Reserve president called the entire industry worthless. In another, a senator demanded guarantees that taxpayer money wouldn't be used to rescue it. And somewhere in between, Bitcoin quietly bled below $66,000.

Let's untangle this mess.

Kashkari Goes Full Send

Minneapolis Fed President Neel Kashkari stood on a stage in Fargo, North Dakota today and said what a lot of TradFi people think but rarely say out loud: "Crypto has been around for more than a decade, and it's utterly useless."

He wasn't done. When moderators brought up stablecoins — the sector that even crypto skeptics usually concede has legs — Kashkari dismissed the entire pitch as "buzzword salad." His challenge was simple: "What can I do with a stablecoin that I can't do with Venmo today?"

It's a fair question on the surface. But it's also the kind of question that reveals how deeply insulated U.S. financial regulators are from the rest of the world. Ask someone in Nigeria, Argentina, or Turkey whether stablecoins beat Venmo. They'll laugh at you — because Venmo doesn't exist for them. USDT does.

Kashkari acknowledged that emerging market adoption is growing, but waved it away with concerns about conversion costs. Which, sure, converting USDT to local currency isn't free. But neither is the 7% remittance fee that Western Union charges, or the multi-day settlement times on SWIFT. The bar isn't perfection — it's "better than what exists." And for billions of people, stablecoins clear that bar easily.

Warren Wants a Bailout Guarantee (That Nobody Asked For)

Meanwhile, Senator Elizabeth Warren sent a letter to Treasury Secretary Scott Bessent and Fed Chair Jerome Powell demanding they confirm the government won't use public funds to "prop up Bitcoin" or rescue crypto firms.

Bitcoin has dropped roughly 50% from its October highs, currently trading just under $67,000. Leveraged positions have been liquidating in cascades. It's painful for people who are overexposed. But here's the thing — nobody in crypto asked for a bailout.

CZ, the Binance founder, put it bluntly on X today: "Crypto never needed a bailout, never will." And he's right. The entire point of this industry is that it operates outside the traditional safety net. No FDIC insurance. No lender of last resort. You take the upside, you eat the downside. That's the deal.

Warren's letter feels less like genuine policy concern and more like political positioning — framing crypto holders as potential welfare recipients for wealthy insiders right as her opponents push pro-crypto legislation. She specifically called out World Liberty Financial, the DeFi venture tied to the Trump family, which reportedly sold 173 wrapped Bitcoin to repay $11.75 million in USDC. The subtext isn't subtle: if the government helps crypto, it helps Trump.

The Real Story: Stablecoin Legislation Is Stalled

While everyone was focused on the headline drama, the actually important development was quieter. The White House hosted another round of negotiations between bankers and crypto policy experts on stablecoin yield rules. They made "progress," but there's still no deal — and the lack of agreement is holding up the broader crypto market structure bill.

Ripple CEO Brad Garlinghouse said today there's a "90% chance" that market structure legislation passes by April. That's optimistic, but not insane. The stablecoin yield question is the last big domino: banks want to preserve their monopoly on yield-bearing products, while crypto wants stablecoins to compete with savings accounts. Whoever wins that fight shapes the next decade of digital finance in America.

Our Take

Here's what's actually happening: crypto is going through the messy, ugly, politically charged process of becoming legitimate financial infrastructure. That means Fed presidents will trash-talk it. Senators will grandstand about bailouts that nobody wants. And behind closed doors, lawyers and lobbyists will haggle over the real policy details.

Bitcoin at $66K after a 50% drawdown feels terrible if you bought the top. But zoom out — the U.S. has a strategic Bitcoin reserve, stablecoin legislation is in active negotiation at the White House, and even the people calling crypto "useless" are spending their Thursday talking about it. The narrative isn't "crypto is dying." The narrative is "crypto is becoming too big to ignore, and the establishment doesn't know what to do about it."

The price will recover or it won't. But the infrastructure being built right now — the legal frameworks, the custody solutions, the payment rails — that's permanent. Kashkari can call it buzzword salad all he wants. The rest of the world is already eating.

Not financial advice. DYOR.