Fed Chair Warsh Says No Crypto Bailouts Even in a Crisis

Federal Reserve Chair Kevin Warsh reaffirmed that the central bank would not step in with a bailout even if a financial crisis hits the cryptocurrency market.

Crypto Briefing reported on July 14 that Warsh told a House hearing he does not want the Fed involved in bailouts when asked whether the central bank could intervene during a crisis in the crypto market.

He said he would do everything possible to reduce such added risk. At the same time, he stressed that he wants to uphold the principle of not rescuing specific industries, including crypto, even if a crisis emerges in the next few years.

Warsh took office as Fed chair on May 15 and presided over his first Federal Open Market Committee meeting in June. At that meeting, the Fed left its benchmark interest rate unchanged at 3.50% to 3.75%, citing inflation that remained above its 2% target.

Warsh has long criticized the large-scale asset purchases and balance-sheet expansion that followed the 2008 global financial crisis, a position he held even during his time as a Fed governor. He has also maintained that the Fed should reduce its balance sheet over the long term, with assets now at $6.5 trillion to $6.74 trillion.