According to foreign sources, Federal Reserve Chairman Kevin Warsh stated at a congressional hearing on 14 July that the Federal Reserve did not want to take on a rescue role if the encryption industry or the stable currency market were to be run over. This statement has received attention not only because of its position, but also because Warsh had previously publicly held many encrypted-related investments.
The hearing sent a clear signal.
According to the article, Warsh, in response to a question from Congressman Brad Sherman, stated that the Federal Reserve “does not want to do a rescue business” with the aim of freeing any market participant from poverty relief and the encryption industry. This is seen as a public denial of the industry ' s long-suspect implicit safety net.
Crisis intervention not fully excluded
However, according to external sources, the complete presentation of Warsh was not completely closed. At the same time, he said that the Fed would do its best to mitigate the impact if special risks arose in the coming years. He did not give an absolute exclusion as to whether the scalding would trigger further action.
This means that he rejects the expectation of regular relief, rather than abandoning intervention in all cases. According to the article, the true point of delimitation lies in whether the risk has evolved from a single encrypted event to a systemic shock.
Stable currency risk is the focus of discussion
According to the article, the size of the stable currency market is close to $31 billion. This year's study by the Federal Reserve in New York also points to the potential for currency stabilization pressures to inform the banking system. If the risk is limited to small and medium-sized issuers, the holder may have to bear the loss on its own; however, the situation may be different if it affects the large, stable currency and strikes the United States Treasury debt or buy-back market where its reserves are located.
USDC event remains an important reference
The media also reviewed the USDC breakout in 2023. At that time, Circle disclosed that approximately $3.3 billion of the reserves were stored at Silicon Valley Bank, and USDC fell to about $0.87 at one time. Subsequently, the United States regulatory authority applied a systematic risk disposal to Silicon Valley Bank, indirectly helping USDC to restore anchorage.
According to the article, the incident demonstrated that the closest time in the history of the encryption industry was to “saved”, not specifically for the policies of encrypted assets, but rather for the spillover effects of the banking system's relief. Today, Warsh publicly dilutes this expectation, which means that stabilizing currency issuers, trustees and market participants are less likely to factor hidden support at the federal level directly into risk pricing.
Additional information:Warsh had also previously indicated that the regulatory authority was expediting the introduction of the GENIUS Act rules, but that, according to external sources, the relevant agencies had subsequently failed to complete the process in time for the industry to face both unfinished rules and uncommitted rescue arrangements.