Trump’s Fed Pick Is One Vote Away From Leading the Central Bank — And He Has Crypto Ties

TLDR

• The Senate confirmed Kevin Warsh to the Fed Board of Governors in a 51-45 vote, with only one Democrat in support.
• Warsh now faces a separate Senate vote to become Fed chair, replacing Jerome Powell whose term ends Friday.
• Warsh has prior investments in crypto and blockchain firms, which he has pledged to mostly divest.
• The confirmation comes as the Fed weighs stablecoin rules, bank crypto custody, and digital payment systems.
• The same week, a Senate committee is set to mark up the Digital Asset Market Clarity Act (CLARITY).

The US Senate has confirmed Kevin Warsh as a Federal Reserve governor, moving him one step closer to leading the central bank. A separate vote to make him Fed chair is expected this week.

Lawmakers approved Warsh in a 51-45 vote on Tuesday. It passed largely along party lines. Senator John Fetterman of Pennsylvania was the only Democrat to vote in favor.

Warsh still needs to win a second Senate vote to become chair. That vote is expected Wednesday. The two roles carry different terms — governors serve 14 years, while the chair serves four.

Warsh, 56, would replace Jerome Powell as Fed chair. Powell’s eight-year term ends Friday. However, Powell has said he will stay on the Fed board while a federal investigation into renovations at the Fed’s Washington headquarters continues.

Warsh previously served as a Fed governor under Presidents George W. Bush and Barack Obama from 2006 to 2011. Before that, he worked as a banker at Morgan Stanley.

Warsh’s Crypto Ties Draw Attention

His financial disclosures, filed with the Office of Government Ethics, showed investments in blockchain and digital asset companies. These included firms tied to decentralized finance, crypto payments, tokenized networks, and Bitcoin infrastructure.

The holdings also covered Layer 1 and Layer 2 blockchain networks, as well as prediction markets. All of these were held through venture funds and private entities.

Warsh has pledged to divest most of those investments if confirmed as chair. His background gives him familiarity with crypto markets at a time when the Fed is actively reviewing related policy.

The Fed is currently weighing rules on stablecoin regulation, bank crypto custody, and research into digital payment systems. A new chair with hands-on experience in the space could influence how that policy takes shape.

Democrats Raise Independence Concerns

During his Senate Banking Committee hearing, Democrats questioned whether Warsh could act independently from the White House. President Trump had repeatedly threatened to fire Jerome Powell, raising concerns about political pressure on the Fed.

The confirmation comes as investors are watching for signals on interest rates. Renewed inflation concerns tied to the conflict in Iran and rising energy prices have added urgency to the question of Fed leadership.

Powell’s departure from the chair role ends eight years leading the central bank through the pandemic, rate hikes, and a period of high inflation.

Warsh’s confirmation also comes the same week the Senate Banking Committee is set to mark up the Digital Asset Market Clarity Act, known as CLARITY. The bill would reshape oversight and regulation of cryptocurrencies.

On Monday, committee leadership released the text of the bill, which includes a compromise on stablecoin yield — a long-standing sticking point for the crypto and banking industries. The markup is scheduled for Thursday.

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