cbdc

In the context of cryptocurrencies, stablecoins, and the rapid development of digital payments, CBDC is becoming an inevitable trend in the global financial system. Many countries view CBDC as a strategic tool to protect monetary sovereignty and modernize the payment system.

Definition of CBDC
CBDC, fully written as Central Bank Digital Currency, can be understood as digital money issued by the Central Bank, equivalent in value to traditional fiat money like cash. Essentially, CBDC is not a new type of currency, but a digital version of the national currency, guaranteed and regulated by the State.

On the evening of January 29, 2026, Kevin Warsh made a surprising appearance at the White House. Within hours, prediction markets reacted sharply. On Polymarket, the odds of Warsh becoming the next Chair of the Federal Reserve surged to 95%.
Warsh is no ordinary candidate. Once the youngest governor in Fed history, he played a pivotal role during the 2008 financial crisis, and nearly secured the Fed Chair position before Jerome Powell. This raises a crucial question for investors worldwide: who is Kevin Warsh, and what would his leadership mean for monetary policy, crypto, and global markets?
Who Is Kevin Warsh?
During a press briefing on January 29, Donald Trump confirmed that the nominee for Fed Chair would be announced on Friday morning U.S. time, corresponding to the evening of January 30. On the same day, CNN reported that Warsh had been seen at the White House, sparking speculation that he had overtaken other contenders.
Warsh served as a Fed Governor from 2006 to 2011 under President George W. Bush. Appointed at just 35 years old, he became the youngest person ever to sit on the Federal Reserve Board of Governors.
Before joining the Fed, Warsh worked at Morgan Stanley in mergers and acquisitions. He later entered public service as Special Assistant for Economic Policy to President Bush and Executive Secretary of the National Economic Council. Today, he is a scholar at Stanford University’s Hoover Institution and a senior adviser at Duquesne Family Office, the investment firm of billionaire Stanley Druckenmiller.
One detail that has drawn particular attention is Warsh’s family connection. He is married to Jane Lauder, granddaughter of the founder of Estée Lauder. His father-in-law, Ronald Lauder, is a longtime ally of Trump and a major Republican donor. Many observers believe this relationship has helped Warsh gain access to the inner circle of power in Washington.
How Would Monetary Policy Change Under Warsh?
Kevin Warsh’s economic philosophy differs sharply from that of Jerome Powell, and this contrast is at the heart of market anxiety.
Hawk or Dove?
For much of his career, Warsh was known as a policy hawk, prioritizing inflation control over economic stimulus. In 2011, he resigned from the Fed in protest against Chairman Ben Bernanke’s quantitative easing program, arguing that excessive money creation would sow the seeds of future instability.
Yet recently, Warsh’s tone has shifted. He has publicly supported interest rate cuts, and Trump confirmed that Warsh “believes rates should come down.” This apparent reversal has left investors wondering whether Warsh’s views have genuinely evolved—or if he is aligning with Trump’s push for lower rates.
“Inflation Is a Choice”
Perhaps Warsh’s most famous line is, “Inflation is a choice.” By this, he argues that inflation is not an inevitable byproduct of growth or higher wages, but rather the result of policy decisions made by the Fed.
In Warsh’s view, the real driver of inflation is not an overheated labor market, but the Fed’s $7 trillion balance sheet, which continues to inject liquidity into the financial system. His proposed solution is unconventional: cut interest rates while simultaneously shrinking the balance sheet. By withdrawing excess liquidity, Warsh believes inflation pressures would ease, allowing rates to fall without reigniting price growth.
Critics remain unconvinced. Some economists warn that reducing the balance sheet too quickly could tighten financial conditions and slow growth, while attempting to lower rates at the same time risks policy confusion and unintended consequences.
Redefining the Fed-Treasury Relationship
Another controversial idea from Warsh is his call for a new “Fed–Treasury Accord,” modeled after the agreement reached in 1951 after World War II. He argues that the Fed and the U.S. Treasury should coordinate more closely to manage national debt, rather than operating as entirely separate entities.
This aligns with Trump’s belief that the Fed Chair should consult the President on interest rate decisions. For Warsh, Fed independence does not mean isolation from elected leadership—it means accountability within a broader policy framework.
Kevin Warsh and the Crypto Market
Warsh’s position on crypto is nuanced and sometimes contradictory.
Positive: He has invested in crypto-related startups, including the now-defunct algorithmic stablecoin project Basis and Bitwise, a digital asset index fund manager. He has acknowledged that Bitcoin could function as a long-term store of value, comparable to gold.
Skeptical: Warsh has expressed doubt about Bitcoin’s role as a medium of exchange, citing extreme price volatility. Writing in the Wall Street Journal in 2022, he said, “Cryptocurrency is a misnomer—it’s not mysterious, and it’s not money. It’s software.”
The greatest concern for the crypto community is Warsh’s support for a U.S. central bank digital currency (CBDC). He believes America must develop a digital dollar to compete with China’s digital yuan, which conflicts with Trump’s pledge to block any form of digital currency issued by the Fed.
Lower interest rates under Warsh could, in theory, benefit risk assets like equities and crypto by pushing investors toward higher-yield opportunities. However, if a Warsh-led Fed aggressively pursues a digital dollar, stablecoins and decentralized payment systems could face direct competition from the government.
What Investors Should Watch Next
Regardless of who ultimately takes the Fed Chair, two timelines matter most:
May 2026: Jerome Powell’s term ends, and the new chair officially assumes office. This is when policy direction could begin to shift in earnest.
Second half of 2026: Investors are betting that if the new leadership initiates genuine monetary easing, global liquidity could return, bringing renewed momentum across financial markets.
Kevin Warsh stands at the crossroads of these possibilities. Whether he becomes a catalyst for stability or a source of deeper volatility may define the next chapter of the global financial system. #Ethereum #GlobalMarkets #CBDC $BTC $ETH $BNB #Binance

Crypto enthusiasts are watching Kevin Warsh closely. Warsh has a history of investing in crypto startups, including Bitwise and the now-defunct Basis stablecoin project. He also recognizes Bitcoin as a store of value, akin to digital gold.
However, he has expressed skepticism about crypto as a currency, citing volatility and calling it “software, not money.” His support for a U.S. central bank digital currency (CBDC) raises potential competition for decentralized stablecoins and payment systems.
Potential Market Impact
Lower interest rates under Warsh could push investors toward crypto and equities. Yet, a CBDC could reshape the digital payment landscape, creating both opportunities and challenges for the crypto ecosystem.
Investor Insight
Warsh’s Fed policies will likely be market-moving, impacting risk assets, crypto adoption, and liquidity. Smart investors will watch May–June 2026 closely when policy shifts may begin in earnest.

#Crypto #bitcoin #Ethereum #CBDC #KevinWarsh $BTC $ETH $BNB

In the global financial chessboard, where the US dollar is considered the undisputed "king", China has quietly begun to move a new piece: the central bank digital currency (CBDC), known as the digital yuan (e-CNY).
The question posed by economists and geopolitical analysts is not "Will" this currency change the rules of the game, but "How" and "When". Are we witnessing the beginning of the end of the dollar's dominance, or is it just a limited technical development?