On Friday, it emerged that President Trump’s choice to replace Federal Reserve Chairman Jerome Powell in May will be Kevin Warsh, who served as a member of the Federal Reserve Board of Governors during the Bush and Obama administrations. The choice has drawn strong attention from the crypto industry, as Warsh has made mixed statements about bitcoin, central bank digital currencies (CBDCs), stablecoins, and blockchain technology over the years.
While Warsh previously supported the benefits of CBDCs over stablecoins, he was also an investor in stablecoin startup Basis, which is building a type of stablecoin, known as an algorithmic stablecoin, similar to the one involved in the 2022 crypto crash. Additionally, Warsh was involved in the early days of the now publicly traded Bitwise Asset Management (TFEtra) and other crypto assets.
As for bitcoin specifically, Warsh made comments that ranged from neutral to positive. Once upon a time he told CNBC that bitcoin is effectively gold for anyone under the age of 40. Recently, he defended bitcoin in an interview on General Information with Peter Robinsonsaying, “Bitcoin doesn’t bother me. I see it as a valuable asset that can help inform policy makers when they’re doing things right and wrong. It’s not a substitute for the dollar. I think it can often be a very good police officer of policy.”
I don’t say #bitcoin it was our secret government project to give us an exit strategy after destroying the dollar but it would make sense if that was the case.
— Kyle Torpey (@kyletorpey) June 13, 2021
If you combine Warsh’s views on bitcoin and stablecoins, it is in line with the Trump administration’s policies on crypto, which include the use of stablecoins to strengthen US monetary hegemony and the establishment of a national bitcoin repository. Warsh’s comments about bitcoin’s effectiveness as a way to keep policymakers in check will be in line with research from Jal Toorey, who has long argued that bitcoin is the perfect foundation for mathematician John Nash (yes, the one from Good Idea fame) Ideal Money concept.
All this may sound good for bitcoin; However, the truth is that the price of the crypto asset initially fell on the news of Warsh’s upcoming appointment. According to the report of CoinDeskthis may be due to Warsh’s previous comments indicating a more hawkish stance on Fed policy than expected from Trump, who has been mocking Powell for not cutting interest rates. That said, it is important that the chairman of the Fed does not have absolute power over the central bank’s policy.
Although bitcoin is often considered a safe asset like gold, it is often referred to as a risk asset in times of economic uncertainty, as shown by the recent tensions in Greenland. Of course, gold itself has been pretty much as active as bitcoin when it comes to price volatility lately.
At the end of the day, it is still very early in terms of central bank interest in bitcoin, Bank of France Governor François Villeroy de Galhau recently revealed that he did not know that bitcoin does not have a central issuer during an interview with Coinbase CEO Brian Armstrong at the World Economic Forum. That means the Czech National Bank received another bitcoin as part of a pilot program last year, not long after European Central Bank President Christine Lagarde said such a project would never happen.
Description: Fed.
Antithesis: Bitcoin.
Synthesis: The pro-Bitcoin Fed.pic.twitter.com/WKSQYlxgxP– Balaji (@balajis) January 31, 2026
It’s hard to know exactly what Warsh’s policy will be once he returns to the Fed, but his appointment furthers the discussion about the potential relationship between bitcoin and the US dollar. With US debt reaching unsustainable levels and foreign central banks holding more gold than US treasuries for the first time since 1996, one has to wonder if Russian President Vladimir Putin’s economic adviser was right to call out the United States for its crypto-focused plan to maintain financial dominance in an increasingly digital and seemingly multi-polar world. That said, as the use of the Tether stablecoin USDT by the Maduro regime in Venezuela and the Central Bank of Iran has shown, crypto can be a double-edged sword for the US.
Of course, there is also the story of the fortune of the Trump family now tied to the success of the crypto industry in the US to consider, with 1.4 billion crypto profits obtained last year amid allegations of unprecedented corruption and pay-to-play schemes. This type of profiteering could eventually lead to political backlash, as Senate Democrats have repeatedly said that these conflicts of interest must be addressed in the CLARITY Act.
