According to Federal Reserve Chair Kevin Warsh, the US central bank would not support stablecoin or cryptocurrency firms during upcoming financial crises. In addition, he affirmed that the Fed is working to fulfill the GENIUS Act rulemaking deadline, pledged to keep politics out of banking supervision, and outlined more regulatory changes to build a just and competitive financial system.
During a hearing on the Fed’s semi-annual monetary policy report before the House Financial Services Committee, Warsh made these remarks. The Federal Reserve does not want to serve as a safety net for the digital asset sector, Warsh said. He stressed that the central bank should endeavor to avert systemic risks rather than intervening with emergency rescues once problems occur, drawing on his experience from the 2008 financial crisis.
His remarks make it very evident to investors and cryptocurrency companies that they shouldn’t rely on government assistance when the market is under stress. Instead, as stablecoins grow more significant in international payments and decentralized finance, businesses will need to enhance their own risk controls, transparency, and liquidity management.
Warsh also addressed concerns raised by some senators over “Operation Choke Point 2.0,” which they claim unfairly restricted banking services to digital asset firms. He affirmed that the Federal Reserve’s supervisory framework no longer includes “reputational risk” and stated that political influence should not be allowed to affect banks monitoring. In order to promote competition and make the financial system safer, he added, further reforms are on the horizon.
Warsh stated that the Federal Reserve is moving swiftly to publish draft rules under the GENIUS Act before this week’s deadline for stablecoin regulation. In order to provide financial institutions with uniform guidelines and allow the public to participate in a single consultation process, he likes to coordinate regulation with other U.S. banking authorities.
Warsh also talked on artificial intelligence, characterizing it as one of the most cutting-edge technologies on the market right now. He made the argument that while AI could momentarily disrupt some jobs, it is more likely to boost productivity and promote long-term economic growth. To investigate the wider economic effects of AI, the Federal Reserve has already engaged independent experts.
The hearing represents a significant shift in the Fed’s strategy under Warsh, fusing more transparent monitoring of digital assets with impartial regulation. It also makes it evident that cryptocurrency markets will have to function on their own without the support of central banks.
WATCH: @RepLoudermilk on reputation risk at the Fed:
“… Operation Chokepoint 2.0 involved partisan actors at the Fed using is, quote, reputation risk as a means to target and debank firms and individuals in the digital asset ecosystem, the energy industry, and really anyone… pic.twitter.com/XO38u5w6Sd
— Financial Services GOP (@FinancialCmte) July 14, 2026
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