Warsh Testifies: Says He Supports Crypto, Denies Being Trump’s “Puppet”

At Tuesday’s confirmation hearing before the Senate Banking Committee, Kevin Warsh, Trump’s nominee for Federal Reserve chair, launched a fierce back-and-forth 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 integrated into the U.S. financial system, Warsh gave an affirmative answer, saying that cryptocurrencies have become an indispensable part of America’s financial services industry.
But the focus of the hearing quickly shifted to the issue of Fed independence. Democratic Senator Elizabeth Warren questioned whether Warsh was Trump’s “puppet,” citing Trump’s earlier remarks: “When Warsh takes office, interest rates will go down, and those who disagree with me will never become Fed chair.”
But Warsh firmly denied it, saying that Trump had never asked him or pressured him to cut rates. 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. The value of his crypto investment portfolio is over $130 million, including investments in crypto projects such as Compound, dYdX, and Lighter, as well as blockchain projects like Solana and Optimism.
In response to a series of questions from Democrats, Warsh said that he had reached an agreement with the Office of Government Ethics and would sell all his investments before taking office.
Republican Senator Thom Tillis said he would not support Warsh’s nomination until the Department of Justice ends its investigation into the current chair, Powell. That investigation is widely seen as a political interference in Fed independence.
Warsh also said he hoped to launch “a policy system 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 prevent shocks to financial markets.
Taken together, 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 adapting to financial innovation and formulating an independent monetary policy.
No matter what the confirmation result 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.
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