Jerome Powell’s 2026 Exit and the Potential Pro-Crypto Shift in U.S. Monetary Policy

The impending departure of Jerome Powell as Federal Reserve Chair in May 2026 marks a pivotal moment for U.S. monetary policy, with significant implications for digital asset regulation and investment. Powell’s term as chair ends in 2026, though his tenure on the Board of Governors extends until 2028. However, the Trump administration’s active search for a successor—and its emphasis on reshaping the Fed’s governance—signals a potential shift toward a more crypto-inclusive approach to monetary policy [3]. This transition, coupled with the growing openness of current Fed officials like Christopher Waller and Michelle Bowman to digital assets, could redefine the regulatory landscape for cryptocurrencies and open new investment opportunities.

A New Era of Fed Leadership and Crypto-Friendly Stances

Rick Rieder, a prominent candidate for the Fed Chair, has emerged as a vocal advocate for cryptocurrencies. As the chief investment officer of BlackRock, Rieder has publicly endorsed Bitcoin as a “key asset” and a potential substitute for gold in diversified portfolios [1]. His perspective aligns with a broader trend among Fed officials: Christopher Waller, for instance, has argued that banks should embrace crypto payments as “new technology to transfer objects and record transactions,” while Michelle Bowman has suggested allowing Fed staff to invest in small amounts of digital assets to gain firsthand experience [4]. These stances reflect a cautious but increasingly supportive attitude toward crypto, contrasting with the more skeptical views of previous administrations.

If Rieder or similarly crypto-inclined candidates ascend to leadership roles, the Fed’s regulatory approach could evolve to accommodate digital assets more seamlessly. This shift is already evident in the Trump administration’s Executive Order 14178, which prioritizes “responsible innovation” in digital finance and explicitly bans the development of a U.S. central bank digital currency (CBDC) [1]. The order also established the President’s Working Group on Digital Assets, tasked with streamlining regulations for stablecoins and blockchain-based financial tools. Such policies could reduce barriers for institutional adoption of crypto, fostering a more predictable environment for investors.

Strategic Regulatory Shifts and Global Comparisons

The U.S. is not alone in rethinking its approach to digital assets. The European Union’s Markets in Crypto-Assets Regulation (MiCA), implemented in 2023, imposes stringent rules on stablecoins and cryptocurrencies to protect investors and ensure financial stability [3]. Meanwhile, China’s aggressive rollout of the digital yuan underscores its strategic focus on CBDCs, contrasting sharply with the U.S. stance. These divergent paths highlight the U.S.’s unique emphasis on preserving dollar dominance through dollar-backed stablecoins, as mandated by the GENIUS Act of July 2025 [4]. This legislation requires stablecoins to be fully backed by high-quality, liquid assets and mandates monthly reserve disclosures, balancing innovation with systemic risk mitigation.

Investment Opportunities in a Pro-Crypto Regime

The evolving regulatory landscape presents compelling opportunities for investors. The SEC’s “Project Crypto” initiative, launched in July 2025, aims to modernize securities laws to facilitate capital formation in digital asset markets [1]. This includes permitting in-kind creations and redemptions for crypto exchange-traded products (ETPs), which could enhance liquidity and reduce costs for investors. Additionally, the CFTC’s expanded jurisdiction over decentralized digital commodities may spur innovation in crypto derivatives and futures markets.

For institutional investors, the Fed’s potential shift toward crypto-friendly policies could accelerate the integration of digital assets into traditional portfolios. BlackRock’s iShares Bitcoin Trust, for example, has already attracted billions in assets under management, signaling growing institutional confidence. Meanwhile, retail investors may benefit from increased access to crypto custody services and stablecoin-based payment systems, as banks adapt to the GENIUS Act’s requirements [4].

Conclusion: A Tipping Point for Digital Assets

Jerome Powell’s 2026 exit represents more than a leadership change—it could catalyze a fundamental reorientation of U.S. monetary policy toward digital assets. With candidates like Rieder advocating for crypto inclusion and regulatory frameworks like the GENIUS Act providing clarity, the stage is set for a new era of innovation. While risks such as market volatility and regulatory arbitrage persist, the alignment of political, regulatory, and market forces suggests that digital assets will play an increasingly prominent role in global finance. Investors who position themselves to navigate this transition stand to benefit from a landscape where crypto is no longer a fringe asset but a core component of modern portfolios.

Source:
[1] Federal Reserve Chair Candidates with Crypto-Friendly Stance [https://www.ainvest.com/news/federal-reserve-chair-candidates-crypto-friendly-stance-final-list-determined-september-2508/]
[2] Blockchain and Digital Assets News and Trends – August 2025 [https://www.dlapiper.com/en/insights/publications/blockchain-and-digital-assets-news-and-trends/2025/blockchain-and-digital-assets-news-and-trends-august-2025]
[3] The 2025 crypto policy landscape: Looming EU and US divergences [https://www.atlanticcouncil.org/blogs/econographics/the-2025-crypto-policy-landscape-looming-eu-and-us-divergences/]
[4] Blockchain 2025 - USA | Global Practice Guides [https://practiceguides.chambers.com/practice-guides/blockchain-2025/usa/trends-and-developments]