If Hasset becomes the new chairman of the Fed, is it favourable information for the crypto market?

Author: Bruce

As the Trump administration prepares a new lineup, the nomination of the Federal Reserve Chair has entered its final stage. The current frontrunner, Kevin Hassett, is not only a key economic figure for Trump but also a staunch supporter with deep ties to the Crypto industry.

Direct Impact of Monetary Policy: Liquidity and Asset Prices

As the highest decision-maker of U.S. monetary policy, the attitude of the Federal Reserve Chairman directly determines the cost of funds and liquidity in the market.

• Hassett's inclination: The market generally expects that if he takes office, he will promote a more aggressive interest rate cut policy.
• Positive for Crypto: A loose monetary environment (low interest rates) usually benefits the price rise of risk assets like $BTC . In fact, after the news emerged that he was a leading candidate, U.S. Treasury yields fell, reflecting market expectations for improved liquidity.

The substantive ownership of stablecoin regulatory authority

According to the GENIUS Act, which will be promoted in 2025, the Federal Reserve will play a central role in the regulatory framework for stablecoins.

• Core supervisory authority: The Federal Reserve will directly supervise stablecoin issuers, establishing the interaction rules between “on-chain dollars” and the traditional financial system.
• Correlation with the Treasury Bond Market: As the scale of stablecoins expands, their role as a major buyer of U.S. Treasury bonds will become increasingly close to the U.S. Treasury market. The Federal Reserve's stance will determine whether stablecoins can successfully scale up, which will in turn affect whether hundreds of billions of dollars can smoothly flow into the cryptocurrency market.

Gatekeepers of Traditional Finance and the Crypto World

The Federal Reserve has determined the degree of openness of the banking system to the crypto industry.

• Compliance Channels: Whether banks and non-bank financial institutions can legally provide services to crypto enterprises and participate in stablecoin operations completely depends on the green light from the Federal Reserve and relevant regulatory agencies.
• Industry Integration: The attitude of the next chairman will determine whether the Crypto industry continues to maintain an “independent ecosystem” or can fundamentally integrate into the mainstream financial system, achieving broader institutional adoption.

Who is Kevin Hassett?

As the candidate with the highest odds currently (with a probability exceeding 50% on @Polymarket), Hassett's connection to the Crypto industry is quite unusual:

• Insider background: He not only holds @coinbase stocks worth millions of dollars, but also served as a member of the Coinbase Academic and Regulatory Advisory Council.
• Policy Advocacy: He has participated in the White House Digital Assets Working Group, advocating for leaving room for innovation in regulation, and believes that Crypto technology is an important variable in the future economic structure.

Unlike the SEC chairman who mainly influences the industry through enforcement actions, the Federal Reserve chairman fundamentally shapes the survival environment of the crypto industry through the “tap” of funds (interest rates) and the “door” of the banking system (access regulation).

If a candidate like Hassett, who is knowledgeable and holds a friendly stance, takes office, it could pave the way for Crypto to move from “marginal asset” to “mainstream finance.”