Kevin Warsh Says Crypto Already Part Of US Financial System – Calls CBDC A ‘Bad Policy Choice’

Federal Reserve Chair nominee Kevin Warsh said on Tuesday that cryptocurrencies are already embedded in the U.S. financial system, pushing back on the idea that the sector still sits outside mainstream finance.

During his Senate confirmation hearing, Warsh was responding to a question from Senator Cynthia Lummis (R-Wyo.), a prominent advocate for digital assets, on whether cryptocurrencies should be integrated into the financial system to expand investment access and consumer protections.

“Digital assets are already part of the fabric of our financial-services industry.” – Kevin Warsh, Federal Reserve Chair Nominee.

Warsh Rejects CBDC, Calls It ‘Bad Policy Choice’

Warsh also addressed concerns around a potential central bank digital currency. In response to Senator Bernie Moreno (R-OH), he said he would not move the Federal Reserve toward issuing a CBDC if confirmed. Warsh added that such a move would fall within his authority as chair, but emphasized that he believes the Fed does not have the right to issue one and it would be a “bad policy choice.”

Financial disclosures show Warsh holds stakes in more than a dozen crypto firms and trading platforms.

Bitcoin’s price rose 0.8% over the last 24 hours, attempting to hold above $76,000, while the equities market was in a downswing. The SPDR S&P 500 ETF Trust (SPY) edged 0.4% lower in midday trade, while the Invesco QQQ Trust Series I (QQQ) tumbled 0.2%. On Stocktwits, retail sentiment around the apex cryptocurrency trended in ‘bullish’ territory over the past day, while chatter dipped to ‘normal’ from ‘high’ levels. 

If confirmed, Warsh would become the first Federal Reserve Chair with venture capital exposure to the cryptocurrency sector. On Kalshi, bettors put a 24% pprobability of him being confirmed before May 15, the day that Jerome Powell’s term expires. Senator Thom Tillis (R-NC) reportedly vowed to block any Fed nominee until the Justice Department drops its criminal investigation into Powell, which the senator has described as a politically motivated attack on the central bank's independence.

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