Kevin Warsh’s nomination to lead the Federal Reserve moved closer to a full Senate vote this week after a closely watched confirmation hearing before the Senate Banking Committee on Tuesday. Committee chair Tim Scott said the process should conclude within weeks, signaling that the panel’s recommendation is now largely a formality.
Senator Thom Tillis, who had previously withheld his vote pending an investigation into outgoing Fed chair Jerome Powell, is now expected to support Warsh’s nomination, according to Scott. Powell’s term ends in May, and he remains under Department of Justice investigation over statements related to the renovation of the central bank’s headquarters.
Stablecoins called “innovative step forward”
During the hearing, Warsh described privately issued stablecoins as a potentially “innovative step forward” for the U.S. payment system, on the condition that they function under a clear federal supervisory framework.
Warsh argued that direct experience with emerging financial technologies is increasingly necessary for effective modern regulation. His remarks drew a mixed response from lawmakers, with some praising his familiarity with the sector and others pressing him on potential conflicts of interest.
Extensive crypto holdings under scrutiny
Scrutiny of Warsh’s digital asset exposure intensified ahead of the hearing, following mandatory disclosures filed with the U.S. Office of Government Ethics. The documents show investments in more than 20 cryptocurrency-related firms and projects.
His holdings include decentralized trading platforms dYdX and Lighter, venture firm Polychain, blockchain developer Dapper Labs, and network projects such as Solana and Optimism. The filings also list emerging startups including Eulith, Lemon Cash, OnJuno, and Ridian.
Warsh has previously taken part in early-stage digital asset ventures, including a now-defunct stablecoin project known as Basis, and has advised or backed crypto index manager Bitwise.
Crypto prices jump after televised testimony
Digital asset markets rallied sharply following the televised hearing. Total crypto market capitalization rose by roughly $95 billion within 12 hours, according to CoinGecko.
Bitcoin gained 4.2% in the 24 hours after the session, trading around $141,300, while Ethereum advanced 5.5% to just over $9,100.
Data from Kaiko showed that tokens named in Warsh’s ethics disclosure significantly outperformed the broader market. Solana and Optimism saw trading volumes jump more than 30% above their weekly averages. Solana’s SOL token climbed 7.8%, and DYDX rose 9.1% over the same period.
Derivatives signal growing interest in ethereum
In derivatives markets, open interest for Ethereum options expiring in the third quarter of 2026 reached a record $18.4 billion on the Chicago Mercantile Exchange. That marks a 12% increase from the prior week and the highest level since the fourth quarter of 2025, indicating rising institutional positioning around future price swings.
Focus shifts to full Senate vote
With the committee stage largely seen as resolved, attention is now turning to the full Senate floor vote that will determine whether Warsh succeeds Powell as chair of the Federal Reserve.
Prediction markets on Polymarket have repriced the odds of Warsh being confirmed before Powell’s term expires at 88%, reflecting heightened confidence that the leadership transition will proceed on schedule.
Warsh’s potential elevation would usher in a new phase for the central bank, as it faces continuing questions over the direction of monetary policy and the Fed’s approach to both traditional finance and the rapidly expanding digital asset sector.
Curious how regulation and policy shape digital money’s future? Explore the role of stablecoins in Asia’s growth in this in-depth guide.
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