The change of the Fed chairman is imminent, and all five candidates support Bitcoin!

U.S. Treasury Secretary Scott Basset recently confirmed that the second round of interviews for the Fed chair candidates is about to begin, with a final selection expected to be determined by the end of the year. Notably, all five major candidates currently demonstrate a supportive stance towards crypto assets, from Christopher Waller comparing Bitcoin to “digital gold” to Kevin Hassett holding shares in a leading U.S. CEX. This personnel change could become a significant favourable information for the digital asset market. This article will delve into the policy inclinations of each candidate and their potential impact on the crypto assets industry.

Comprehensive Analysis of Candidate Policy Positions: From Theoretical Support to Practical Investment

Christopher Waller: Promote crypto institutions to directly access the Fed system.

As the current Fed governor, Waller has proposed the most groundbreaking policy initiative:

• Payment System Access: Calls for allowing crypto companies direct access to the Fed's payment infrastructure, bypassing the traditional banking system.
• Position Shift: Clearly stated that “the DeFi industry should not be questioned or scorned,” acknowledging that digital assets have been integrated into payment and financial system architecture.
• Competition Promotion: Believes that stablecoins have the potential to enhance competition efficiency and reduce financial costs.

Michelle Bowman: Emphasizes a regulatory approach based on practical understanding.

Fed Vice Chair Bowman proposed a unique regulatory philosophy of “practice brings true knowledge”:

• Opposing Excessive Caution: Warning regulators against adopting an “excessively cautious mindset” towards Crypto Assets.
• Personal Experience Advocacy: It is suggested that Fed employees hold a small amount of digital assets to gain a deeper understanding of the technology.
• Metaphor: “I wouldn't trust someone who has never skied to teach me how to ski, no matter how many related books he has read or written.”

Kevin Warsh: Combining Investment Experience with Rational Prudence

Former Fed governor Warsh holds a more complex stance on digital assets:

• Investment Background: Early investments in several well-known crypto companies, including the algorithmic stablecoin Basis and the asset management company Bitwise.
• Value Recognition: Acknowledging Bitcoin's position as a sustainable store of value.
• Confidence in the Dollar's Status: Denies the possibility of Bitcoin replacing the Dollar, emphasizing that its price volatility limits its practicality as a unit of account and a means of payment.
• CBDC supporters: Advocating for the introduction of a digital dollar to strengthen the international status of the dollar, raising privacy concerns.

Market Correlation and Policy Orientation: From Personal Investment to Macroscopic Perspective

Kevin Hassett: A hands-on Crypto Assets investor

Former senior economic official of the Trump administration Hassett demonstrated a tangible commitment to investment:

• Listed CEX Holdings: Holding CEX shares worth up to $5 million
• Political Status: Current Director of the National Economic Council, predicted on October 20 that the government shutdown would end within a week.
• Policy Expectations: As a close associate of Trump, his policy orientation may be more aligned with market innovation needs.

Rick Rieder: An Advocate for Crypto from an Institutional Perspective

BlackRock's Global Fixed Income Chief Investment Officer Rieder supports Crypto Assets from an institutional investment perspective:

• Portfolio Positioning: Publicly stated that Bitcoin is an ideal complement to the portfolio.
• Function Recognition: Emphasizing Bitcoin's powerful tool for asset diversification and hedging against inflation.
• Realistic Limitations: Holding a reserved attitude towards Bitcoin's ability to solve global currency problems.
• Industry Impact: The company BlackRock has already become an important force in the Bitcoin ETF field.

Policy Outlook and Market Impact: The Dual Favourable Information of Loose Monetary Policy and Crypto-Friendly Regulations

monetary policy direction expectations

Trump's dissatisfaction with Powell's delay in interest rate cuts suggests that the new chairman may adopt a more aggressive easing policy:

• Interest Rate Cuts Accelerate: The White House seeks more aggressive interest rate cuts to reduce borrowing costs.
• Ample Liquidity: A long-term cheap currency environment is favourable for Bitcoin and other crypto assets.
• Policy Consistency: Regardless of who is ultimately elected, the friendly stance towards crypto assets will remain consistent.

Improvement space for regulatory environment

The common tendency of the five candidates suggests that the Fed's regulatory attitude towards Crypto Assets may undergo a fundamental change:

• Deeper Understanding: Shifting from hostility or neglect to deep understanding and acceptance.
• Easier Access: Crypto companies are expected to gain more equal access to the financial system.
• Innovation Encouragement: Provide a more relaxed regulatory environment for fintech innovation.

Historical Comparison and Industry Significance: The Turning Point from Marginal to Mainstream

compared to the Powell era

Compared to the current chairman Powell's cautious attitude, the new candidate shows distinctly different characteristics:

• Technical Understanding: Several candidates possess direct experience in encryption investment or technical research.
• Open Attitude: Shift from defensive regulation to actively exploring integration paths
• Forward Vision: Recognizing that digital assets have deeply integrated into the financial system, they cannot be simply ignored or suppressed.

Strategic Significance for the Crypto Industry

The possible change in the leadership of the Fed will have far-reaching effects:

• Enhancement of Legitimacy: Recognition by one of the world's most important central banks will greatly enhance the legitimacy of the industry.
• Capital Inflow: Reduced barriers for institutional investors may trigger a new round of capital inflow.
• Innovation Acceleration: Enhanced regulatory certainty creates favourable conditions for technological innovation and application implementation.

Conclusion

The turnover of the Fed chair candidate may become an important turning point in the development of Crypto Assets. The pro-crypto tendencies exhibited by the five candidates simultaneously reflect that digital assets have gradually moved from the fringe of innovation into the mainstream financial spotlight after more than a decade of development.

Regardless of who ultimately takes charge of the world's most important central bank, the cryptocurrency market is expected to welcome a more friendly and understanding policy environment. This shift is not only reflected in the easing of regulatory attitudes but may also bring substantial policy breakthroughs, such as crypto companies directly accessing the Fed's payment system.

For participants in the crypto assets industry, this represents both a significant opportunity and new responsibilities. As the integration with traditional financial systems deepens, the industry needs to place greater emphasis on compliance, transparency, and risk management to prove that it can be a responsible part of the financial infrastructure.

In the coming months, as candidate interviews progress and the final selection is announced, the market will closely follow the specific direction of this historic transition. It is certain that the dialogue between Crypto Assets and traditional finance is about to enter a whole new stage.