Nakadaily – As Donald Trump’s potential return to the White House looms on the horizon, certain factions within the crypto community urges Trump, already eyeing a key change at the top of the U.S. Federal Reserve.
With Jerome Powell, the current Fed Chairman, under intense scrutiny for his moderate stance on interest rates, crypto advocates are pushing for a replacement who will prioritize market-boosting policies—someone more aligned with Trump’s economic views.
Trump and Powell’s Longstanding Tensions
Trump and Powell’s relationship has been turbulent for years. In 2018, Powell clashed with the president over interest rate hikes, which Trump repeatedly criticized as harmful to economic growth.
Powell, however, defended the Fed’s independence and famously reminded the public that Trump did not have the power to fire him. Although Trump initially backed down, the tension between the two has never fully dissipated.
Despite their differences, Trump recently offered Powell a conditional pledge to allow him to serve until 2026, contingent on Powell continuing what Trump believes to be “the right course.”
Still, many in the crypto industry would prefer Powell to exit sooner, seeing the potential for a more pro-market, pro-crypto leader at the Fed.
Crypto Advocates Push for Pro-Stimulus Leadership
From the crypto perspective, a key priority is securing a leadership change at the Federal Reserve that would support lower interest rates, a larger central bank balance sheet, and potentially even quantitative easing—all measures seen as beneficial for cryptocurrencies and other asset markets.
Crypto promoters believe that such policies could help fuel market expansion and boost liquidity, offering a stark contrast to Powell’s more cautious approach.
Trump’s 2016 appointment of Powell is seen as a potential hindrance to his push for a more market-friendly Fed. However, with the prospect of a second term, Trump is under increasing pressure from his base to deliver on the promise of reshaping the Fed to align more closely with his economic agenda.
As such, the possibility of a new Fed chair who is both loyal to Trump and sympathetic to crypto has become a central topic of discussion.
Candidates to Replace Powell: Who Could Trump Choose?
While speculation about Powell’s future continues, a number of potential candidates for his replacement are already circulating.
These candidates include individuals with significant ties to Trump, the Republican Party, and the financial industry. Some of the leading names include:
- Scott Bessent: A former chief investment officer at George Soros’ firm, Bessent is a vocal critic of Powell and is known for his pro-market stance. He has already served as an economic advisor to Trump and has openly suggested creating a “shadow” Fed chair to bypass Powell’s authority until his term expires in 2026.
- Kevin Warsh: A former Fed governor who lost a promotion bid to Powell in 2017, Warsh has close ties to Trump through his father-in-law, Ronald Lauder, the Estée Lauder tycoon. Warsh is hoping to secure a second chance at the Fed chairmanship under a Trump administration.
- Kevin Hassett: Trump’s former senior economic advisor, Hassett is a loyalist with experience at the White House and as the chairman of the Council of Economic Advisors. His proximity to Trump could position him as a strong contender for the Fed chair.
- David Malpass: Appointed by Trump to lead the World Bank, Malpass has experience in international finance and strong connections within the global financial community, making him a credible candidate for the position of Fed chair.
- Judy Shelton: A staunch critic of Jerome Powell, Shelton was nominated by Trump for the Fed in 2020 but failed to secure confirmation. However, she remains a possible candidate for 2025, with her unconventional monetary views and support for the gold standard aligning with Trump’s desire to reshape the Fed.
These candidates represent a range of economic ideologies, but all share a loyalty to Trump’s vision of a more hands-off, market-friendly monetary policy.
What Would a Pro-Crypto Fed Chair Mean for the Future?
For the crypto community, the prospect of a Fed chair who is sympathetic to their cause is appealing. While Powell has expressed mixed views on digital assets—calling bitcoin “digital gold” while cautioning against its volatility—crypto advocates see a new chair who would prioritize pro-stimulus policies as a means to support the growth of digital currencies.
If Trump does succeed in replacing Powell with a loyalist who supports lower interest rates and increased liquidity, the move could trigger significant changes in U.S. monetary policy, potentially benefiting both traditional and digital asset markets.
Will Trump Move to Fire Powell?
If Trump attempts to remove Powell, it could lead to a protracted legal battle over the limits of presidential control over the independent Federal Reserve. Such a confrontation would be unprecedented and could determine the future direction of U.S. monetary policy.
As the 2025 presidential inauguration approaches, it remains to be seen whether Trump will take this drastic step. However, the growing influence of pro-stimulus and pro-crypto voices within the Republican Party suggests that the push for a more market-friendly Federal Reserve could intensify.
