The potential of the blockchain extends far beyond the bitcoin, according to a representative from the Federal Reserve Bank of Minneapolis.
Taking a swipe at the relative lack of barriers for creating new cryptocurrencies, the Federal Reserve Bank of Minneapolis’ president Neel Kashkari made the assertion in a presentation outlining the organization’s current thinking on blockchain technology.
A former official in the Bush administration, Kashkari assumed his role in 2016. His presentation was delivered at the MN High Tech Association Spring Conference, an event bringing together over 180 companies for the session in Minneapolis this week.
Speaking on the potential of the blockchain, in response to audience questions, Kashkari said that the underlying technology is more significant than the cryptocurrencies that have been derived from it.
"I would say the conventional wisdom now is that blockchain, the underlying technology, is probably more interesting and has more potential than maybe bitcoin does by itself."
However, in addressing concerns over the creation of alternative currency, he was quick to point to the threat of inflation of alternative currencies.
"The problem I have is while it says, by design, you're limiting the number of bitcoins that can be created, it doesn’t stop me from creating NeelCoin or somebody from creating Bobcoin or Marycoin or Susiecoin."
The announcement comes in a week where cryptocurrencies have surged to new all-time highs, with bitcoin in particular exceeding $1700 for the first time.
Kashkari’s sentiments echo concerns from other analysts, with many fearing alternative currencies could be heading for unsustainable pricing levels.
But his vote of confidence in the underlying technology will be welcomed by industry commentators and developers, highlighting the emerging positive outlook for the technology among regulators worldwide.
His remarks support similar comments from Janet Yellen, the chairwoman of the Federal Reserve, who spoke in January of the importance of blockchain technology, and comes just several months after the Fed’s first major research paper on the issue.
This follows similar steps from regulators internationally, with governments, central banks and research bodies combining to highlight the significance tied up in this technology.