Kevin Warsh, chair of the U.S. Federal Reserve, made clear he would not bail out cryptocurrency companies in a financial crisis, blockchain outlet U.Today reported on July 14.

Warsh said at a recent congressional hearing that the Fed's role is not to provide after-the-fact support to the digital asset industry.

Warsh stressed that the Fed's goal is to prevent systemic risk. "We don't want to be in the bailout business," he said. "We don't want to be in the business of bailing anybody out, including crypto," he said. That was interpreted as meaning the central bank would not intervene by saving individual companies even if turmoil in crypto markets spread across the broader financial system.

Warsh did not view crypto as an exceptional area outside the financial system. At an April Senate confirmation hearing, he said crypto should not exist outside the financial system. At the time, Warsh said, "Digital assets are already inside the structure of the U.S. financial services industry." The message was that crypto is part of the regulated financial system, but should not expect a central bank backstop.

Warsh also opposed introducing a U.S. central bank digital currency. He described a CBDC as a "bad policy choice." The stance aligns with the views of many Republican lawmakers. It drew a line against issuing a federal-level digital dollar while recognizing the place of private digital assets within the U.S. financial system.

The hearing focused on inflation and the broader U.S. economy. Warsh warned against concluding that inflation is easing based on June price data alone. "It's one data point," he said. "I don't want to overread the data or cherry-pick it in a way that suits my tastes," he said. Some market participants may view short-term improvement as meaning inflation and monetary policy burdens are over, but the Fed does not see it that way.

Warsh again set returning inflation to the 2 percent target as the Fed's top priority. He also said he would preserve independence regardless of political pressure. Referring to his relationships with former Fed chairs, he said he learned lessons from each but ultimately would lead monetary policy with his own judgement.

He offered a relatively optimistic view on technology. Warsh said artificial intelligence could sharply lift U.S. productivity. If past patterns of technological innovation repeat, he said the United States could become wealthier and more productive through the current AI cycle.

By contrast, he said the country needs to speed up its response to quantum computing. Warsh said there is a large pool of talent at the federal level but that action must keep pace with the speed of technological development. He cited quantum technology as an area needing greater national attention.

The remarks were seen as reaffirming the principle that while the Fed views crypto as part of the regulated financial system, it will not take on the role of lender of last resort in a crisis. They also laid out the Fed's policy priorities, including price stability, central bank independence and responses to AI and quantum computing.