The US Senate voted 54-45 to confirm Kevin Warsh, a Bitcoin advocate, to replace Jerome Powell at the Fed amid inflation reaching 3.85%.
The U.S. Senate on Wednesday confirmed Kevin Warsh as the 17th chairman of the Federal Reserve by a vote of 54-45, ending months of political tension surrounding the most powerful seat in the global financial system.
Warsh, President Donald Trump's choice, will take over a central bank grappling with Dai inflation and unprecedented political pressure.
The confirmation process wasn't entirely smooth. The Justice Department's investigation into his predecessor, Jerome Powell, although closed, was a stumbling block for some lawmakers. Powell said he would continue as a voting member of the Federal Open Market Committee (FOMC) to defend the institution against what he described as "unprecedented" legal attacks.
Meanwhile, Fed Governor Lisa Cook is embroiled in a legal battle with the White House over allegations of mortgage fraud, adding further darkness to the Fed's governance picture.
Cryptocurrency assets are entering a new era at the central bank.
For the cryptocurrency community, Warsh's approval holds significant symbolic meaning. He was the first Fed chairman to publicly state that Bitcoin "doesn't worry me" and described the cryptocurrency as already being part of the structure of the U.S. financial services industry, a statement he made directly during his Senate confirmation hearing.
Warsh also revealed personal investments in crypto-native projects such as Polymarket and Solana, despite previously calling some cryptocurrency projects fraudulent and worthless.
Senator Cynthia Lummis, a leading voice in support of crypto assets in the Senate, welcomed the fact that this is the moment when American businesses and crypto holders “finally have a leader at the Fed willing to do that.”
However, the macroeconomic picture presents a significant challenge for the new Chairman. Inflation data released on Tuesday showed consumer prices rose 3.85% in the 12 months to April, the highest level since May 2023 and continuing to move away from the Fed's 2% target. Bitcoin prices remained largely unchanged after the approval announcement, fluctuating around $79,500.
Myriad forecasts the probability of the Fed cutting interest rates by 25 basis points before July at just 3.7%, down from 4.7% 30 days earlier. Warsh is known as an "inflation hawk," but Juan Leon from Bitwise points out that the path to interest rate cuts could still open if AI-driven productivity creates enough policy space, a scenario that the crypto market is closely watching.
