Rita Dfouni
- Eleven individuals are being considered by Trump to succeed Jerome Powell as Fed Chair.
- Three candidates have expressed opinions that are supportive of cryptocurrencies: Rieder, Waller, and Bowman.
- Powell’s cautious approach runs counter to the growing acceptance of digital assets.
At least 11 individuals are being considered by the Trump administration as it considers its choices as Federal Reserve Chair Jerome Powell’s term ends in May. Three of them have expressed a markedly favorable view of cryptocurrencies, which has sparked conjecture about how the next Fed chief may formulate policies regarding digital assets.
According to Treasury Secretary Scott Bessent, who spoke to Fox News on Wednesday, a shortlist of “11 very strong prospects” is anticipated in the upcoming weeks. Vice Chair Philip Jefferson, Governor Chris Waller, Vice Supervision Chair Michelle Bowman, former Fed Governor Larry Lindsey, former St. Louis Fed President James Bullard, and Dallas Fed President Lorie Logan are among the possibilities mentioned, according to CNBC. Other candidates include David Zervos of Jefferies, Rick Rieder of BlackRock, one of the most watched voices on Wall Street, and Marc Sumerlin, an economic consultant during the Bush administration.
Because lower interest rates tend to provide liquidity and stimulate enthusiasm for riskier assets like Bitcoin and Ether, the Fed’s choices have a significant impact on the cryptocurrency markets. Rate increases, on the other hand, tend to draw money away from risky investments.
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BlackRock’s rieder: “Bitcoin is here to stay”
BlackRock’s chief investment officer for global fixed income, Rick Rieder, has frequently voiced optimism over cryptocurrencies. He predicted that Bitcoin would eventually play a significant role in the asset allocation framework in an interview with The Wall Street Journal in early 2024. He told CNBC back in 2020 that cryptocurrency was “here to stay” and commended the younger generation for embracing digital assets.
The fact that his company, BlackRock, currently oversees the biggest Bitcoin and Ether exchange-traded funds (ETFs) on the market further solidifies its position as a legitimate investment class.
Waller and bowman signal openness to crypto
Vice Chair for Supervision Michelle Bowman and Fed Governor Chris Waller have also surfaced as possible proponents of cryptocurrency.
In order to increase the central bank’s regulatory knowledge, Bowman has proposed that Fed employees be permitted to possess tiny quantities of cryptocurrency in order to obtain direct familiarity with the technology. Waller reiterated a day later that there was “nothing to be fearful of” with relation to cryptocurrency payments, characterizing them as “just new technology to transmit objects and record transactions.”
Their statements contradict Powell’s cautious strategy. Powell has admitted that cryptocurrency has gained popularity, but he has generally remained pessimistic, characterizing Bitcoin as more like gold than a competitor to the US dollar.
Jefferies’ quiet crypto footprint
Through the bank’s strategic investments, David Zervos of Jefferies, another name on the list, has also had indirect exposure to cryptocurrency. Jefferies first backed Michael Saylor’s Bitcoin accumulation approach and has since backed Circle Internet Group, eToro, Bullish, and Figure Technologies. Years ahead of its contemporaries, the bank even devoted a senior position only to cryptocurrency.
What’s at stake
Powell’s board seat is valid until 2028, although his chairmanship expires in May. Markets are still being influenced by his future remarks, which include one on Friday that alluded to rate decreases. The selection of his successor may have a big impact on Wall Street and digital assets since the adoption of cryptocurrencies is growing and the Fed’s actions directly affect liquidity circumstances.
