Federal Reserve Chair Kevin Warsh told the House Financial Services Committee on July 14 that the central bank will not rescue cryptocurrency or stablecoins if the sector faces a run.
It was his first congressional testimony since taking the chair in May.
No bailout, full stop
Rep. Brad Sherman pressed Warsh on whether the Fed would offer the kind of support it gave money market funds in 2008.
Warsh invoked his own experience from that crisis and answered plainly:
“We do not want to be in the bailout business, full stop.”
He added that the Fed would only act at the margins to contain systemic spillover:
“We’re going to do everything we can to mitigate those sorts of extraordinary risks… We want to be in a position where we’re not bailing out anybody, including crypto.”
A sympathetic chair draws a hard line
The remarks carry weight given who delivered them.
Before his confirmation, Warsh disclosed venture stakes in a Bitcoin payments startup, a crypto index manager, Bitwise, and a stablecoin venture, plus exposure to more than a dozen blockchain protocols, all divested under Fed ethics rules.
He has previously called Bitcoin “the new gold” for investors under 40.
Even crypto’s most sympathetic Fed chair to date is now drawing a firm line on rescue mechanics.
GENIUS Act deadline looms
The hearing landed four days before July 18, the statutory deadline for key rulemaking under the GENIUS Act, the federal stablecoin law.
The law gives stablecoin holders priority over other creditors when an issuer fails and requires issuers to hold redemption reserves.
Still, a 2026 New York Fed staff report found stablecoin activity can transmit liquidity stress to banks.
Markets shrugged regardless, with bitcoin touching an intraday high near $64,900 on the day.
