The path is clearing for President Trump’s pick to lead the Federal Reserve — and that could have meaningful implications for crypto policy.
What changed
The Justice Department has stepped back from a criminal investigation into Federal Reserve Chair Jerome Powell related to cost overruns on a Fed building renovation. DOJ officials asked the Fed’s inspector general to take the lead on reviewing the renovation and said they would close their probe for now while the IG conducts that inquiry — but they also warned they could reopen the investigation if new facts warranted it.
Why it matters for the Fed chair fight
That move removes the principal obstacle that had prompted Republican Senator Thom Tillis to block Kevin Warsh’s confirmation in committee. Warsh, President Trump’s nominee to replace Powell, has substantial personal wealth that includes some crypto-related assets and is now awaiting a final Senate vote after a recent confirmation hearing. With the DOJ probe paused, the Republican-controlled Senate can move more quickly, and markets tracking confirmations reacted: Kalshi’s odds on Warsh getting confirmed before May 15 jumped from roughly 30% to north of 80%.
Political flashpoints remain
Warsh has insisted in his hearing that he would act independently of White House direction. Democrats — including Senate Banking Committee ranking member Elizabeth Warren — criticized the DOJ’s decision as politically timed and pointed out continued litigation related to another Fed governor, Lisa Cook. Tillis, meanwhile, called Warsh “a great nominee” and said he would support him once the DOJ dropped its inquiry into Powell.
Why crypto watchers should care
Installing a Trump-aligned chair and adding sympathetic governors to the Fed’s board would tilt U.S. monetary and regulatory policymaking in ways that matter to crypto. The Fed influences interest-rate policy and plays a role in rulemaking that affects stablecoin issuers and broader crypto-market regulation. A confirmed Warsh could therefore reshape how the central bank engages with digital assets and financial-stability rules going forward.
Bottom line
With the DOJ pausing its criminal probe and asking the Fed inspector general to investigate the renovation, a major hurdle to Kevin Warsh’s confirmation appears lifted — at least for now. The political debate continues, but the immediate procedural barrier that had risked leaving Powell in place past his term now looks less likely to block a Republican-majority Senate from advancing Trump’s nominee.
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