Warsh Hearing Stance: Supports Cryptocurrency, Denies Being Trump’s “Puppet”

At the confirmation hearing before the Senate Banking Committee on Tuesday, Kevin Warsh, Trump’s nominated candidate for Federal Reserve chair, engaged in a heated exchange with senators on issues including the Fed’s independence, its monetary policy stance, and the status of cryptocurrencies.

At the hearing, when Republican Senator Loomis asked whether digital assets should be incorporated into the U.S. financial system, Warsh gave an affirmative answer, saying that cryptocurrencies have become an indispensable part of the U.S. financial services industry.

But the focus of the hearing soon shifted to the Fed’s independence. Democratic Senator Elizabeth Warren questioned whether Warsh was a “puppet” of Trump and cited Trump’s remarks, saying, “If Warsh takes office, interest rates will go down, and those who disagree with me will never become Fed chair.”

But Warsh firmly denied this, saying Trump had never asked him to cut rates or pressured him to do so. Warsh also emphasized that monetary policy must serve the national interest and pledged to maintain the Fed’s strict independence.

Warsh’s financial disclosure situation also drew market attention. His cryptocurrency investment portfolio is worth more than $130 million, covering crypto projects such as Compound, dYdX, and Lighter, as well as blockchain projects including Solana and Optimism.

In response to a series of questions from Democratic lawmakers, Warsh said he had reached an agreement with the Office of Government Ethics and would sell all of his investments before taking office.

Meanwhile, Republican Senator Thom Tillis said he would not support Warsh’s nomination until the Department of Justice ends its investigation into current Chair Powell. The investigation is widely seen as political interference in the Fed’s independence.

Warsh also said he hopes to launch a “policy institutional change” focused on interest rates rather than quantitative easing and to significantly reduce the Fed’s balance sheet. He also stressed that policy adjustments must be carried out cautiously to avoid shocks to financial markets.

In summary, Warsh’s nomination hearing is not only a review of his personal qualifications, but also a dual test of his ability to balance the core mission of being an independent maker of monetary policy with adapting to financial innovation.

No matter what the confirmation outcome is, at this critical juncture for monetary policy and financial innovation, the appointment of the Fed chair will affect the stability and development of the U.S. financial system.

#Fed Independence