Fed chair pick Kevin Warsh signals pro crypto stance during committee hearing

Kevin Warsh signaled support for integrating digital assets into the U.S. financial system during his Senate confirmation hearing to lead the Federal Reserve.

During a Senate Banking Committee hearing on Tuesday, Warsh backed the idea that crypto already plays a role in finance and should be part of the system going forward. Responding to a question from Sen. Cynthia Lummis on whether digital assets should be incorporated to expand investment access while ensuring consumer protection, Warsh gave a direct endorsement.

“Digital assets are already part of the fabric of our financial services industry in the United States,” Warsh said.

Warsh’s comments offered one of the clearest signals yet on how he may approach crypto policy if confirmed. The former Federal Reserve governor, who served from 2006 to 2011 under Presidents George W. Bush and Barack Obama, has previously described bitcoin as an “important asset that can help inform policymakers,” pointing to its relevance in financial discussions.

Financial disclosures released ahead of the hearing showed exposure to multiple crypto-linked firms and assets. Holdings included positions tied to decentralized derivatives platform dYdX, exchange protocol Lighter, venture capital firm Polychain, NFT company Dapper Labs, along with tokens such as Solana and Optimism.

A more cautious tone emerged on central bank digital currencies. Speaking to Sen. Bernie Moreno, Warsh dismissed the idea of a U.S. CBDC, calling it a “bad policy choice.” The view aligns with ongoing concerns among several lawmakers who argue that a government-issued digital currency could expand financial surveillance.

Political tensions surround nomination

Warsh’s nomination comes at a time of mounting political friction around the Federal Reserve. President Donald Trump selected him earlier this year after repeatedly criticizing current Chair Jerome Powell over interest rate policy. 

A Department of Justice investigation into Powell, tied to alleged false statements about a renovation project at the Fed’s headquarters, has added further strain to the process.

Lawmakers used the hearing to raise concerns beyond monetary policy. Sen. Elizabeth Warren warned against political influence over the central bank, arguing that leadership aligned too closely with the White House could open the door to misuse of authority.

“Having a sock puppet in charge of the Fed would also give the president access to the Fed’s powerful authorities to enrich himself, his family and his Wall Street buddies,” Warren said. 

“It could mean granting special accounts to his family’s crypto company or bailouts to his friends on Wall Street if they get into trouble.”

Republican support for Warsh also remains uncertain. Sen. Thom Tillis said he would withhold his vote until the Justice Department’s probe into the Fed is resolved, even as he expressed a favorable view of the nominee.

“Mr. Warsh, the only thing I’ve found the least bit odd about you is you’ve never watched an episode of Seinfeld,” Tillis said.

Debate over the nomination continues alongside broader discussions in Congress on crypto regulation and market structure, where ties between political figures and digital asset ventures have come under closer scrutiny.