Fed Chair Warsh Declines Cryptocurrency Bailout as GENIUS Act Rules Deadline Looms on July 27

On July 14, Federal Reserve Chair Kevin Warsh told the House Financial Services Committee that the Federal Reserve will not provide bailouts to the cryptocurrency industry. "We do not want to be in the bailout business, full stop," Warsh said, noting that post-2008 bailouts bred moral hazard that he seeks to avoid repeating.

Warsh's stance coincides with a critical deadline: rules implementing the GENIUS Act, enacted in 2025 to regulate stablecoins, are due Saturday (July 27). The stablecoin market currently stands near $310 billion. While Warsh declined to offer an absolute no-intervention pledge, he indicated the Fed would act to limit "extraordinary" systemic risks, leaving room for action in extreme circumstances. The Fed is "racing" to publish its GENIUS Act proposals on time.