WARSH CALLS DIGITAL ASSETS “ALREADY PART OF THE FABRIC” OF FINANCE AS CRYPTO STOCKS SELL OFF ON RATE HAWKISHNESS Federal Reserve chair nominee Kevin Warsh told the Senate Banking Committee Tuesday that digital assets are “already part of the fabric of our financial services industry,” the most direct public statement on crypto from a Fed chair nominee in the central bank’s history. The comment came as Warsh simultaneously stressed Fed independence from Trump’s rate demands, telling senators Trump never directly demanded he cut rates — a hawkish framing that rattled crypto markets more than the crypto remark itself helped them. Bitcoin slid from approximately $77,000 earlier in the session to around $75,500 during the hearing, down approximately 0.6% over 24 hours. Crypto-related equities fell more sharply. Coinbase dropped 5%, Robinhood fell 3.5%, stablecoin issuer Circle fell nearly 6%, and Galaxy Digital declined 4.5%. The moves reflected investor reassessment of rate-cut timing under a Warsh-led Fed. Warsh built his reputation opposing QE and rate cuts after the 2008 financial crisis, and while he has signaled openness to lower rates, his hearing emphasis on independence from political pressure reduced expectations for near-term easing. The structural significance of Warsh’s crypto comment is separate from the rate signal. No prior Fed chair has acknowledged digital assets as part of the existing financial fabric from a confirmation hearing podium. Warsh would oversee stablecoin regulation, bank crypto custody guidance, and any future US CBDC policy. He is required to divest his disclosed crypto holdings — including positions in Solana, dYdX, Aave, Optimism, Polymarket, and Flashnet — before taking office, and will face recusal obligations on matters directly touching those assets for approximately one year after divestiture. The committee did not vote Tuesday and has set no date for the confirmation vote.