The U.S. Senate Banking Committee hearing of President Joe Biden’s three nominees to the Federal Reserve Board might carry limited significance for the future of crypto.
None of the three candidates – Sarah Bloom Raskin, Lisa Cook or Philipp Jefferson – has expressed strong opinions about cryptocurrencies, based on a search of web articles.
Plus, the Fed’s leadership isn’t changing, and the additions to the U.S. central bank’s governing panel may not have much sway in determining the course of crypto regulations, said Robert Baldwin, director of policy at the Association for Digital Market Assets.
“Fed Chair (Jerome) Powell and Governor (Lael) Brainard have been very involved in digital assets to date and have articulated that stablecoins and CBDCs can coexist. If leadership at the Fed had shifted, there would have been a period of learning, delaying current workstreams, and potentially leading to a shift in views towards digital assets,” Baldwin said.
The board, which is the main governing body of the Federal Reserve, consists of seven members who serve a term of four years.
Crypto industry observers will be watching the hearing, because cryptocurrency markets tend to move in response to Federal Reserve monetary policy decisions and regulatory pronouncements.
Biden has nominated Raskin – who was a Fed governor and deputy secretary in the Treasury Department in the Obama administration – to be vice chairwoman of supervision. She would play a leading role in sketching out a regulatory framework for crypto and would work closely with the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The nominees are:
Sarah Bloom Raskin
A Duke University law professor, Raskin is known for her progressive views, which could result in a stricter stance on crypto regulation. Raskin has also previously advocated for regulators to address issues related to climate change more proactively, which could give crypto traders an idea about her view on climate-unfriendly Bitcoin.
Dr. Lisa Cook
Cook served on the White House Council of Economic Advisers under former President Barack Obama, where she focused on economic growth. She is also keen on economic inequality, in particular the effect of racial inequality on the economy. She could play an important role in pointing the central bank toward more financial inclusion, one of the main reasons why crypto emerged in the first place.
Dr. Philip Jefferson
A former research economist at the Fed, Jefferson has focused on the labor market and on poverty issues. He is known for his opinion on how changes in interest rates can have a big impact on low-skilled workers. With the Fed focused on inflation now, Jefferson’s own focus will likely be questioned by senators and will be an issue for crypto traders to watch.