Powell’s crypto turn — How the Fed and institutions back Bitcoin

Following its January 28-29 meeting, the Federal Reserve kept interest rates unchanged, stating that it would wait for more substantial progress on inflation before considering any further cuts. However, what caught markets by surprise was Fed Chair Jerome Powell’s unexpectedly positive comments on crypto—his most accommodating stance on digital assets to date.

Editor’s note: this article was written prior to the U.S. government reaching a tentative deal with Mexico’s government to at the very least suspend implementation of the tariff for one month. You can read about this development here.

Although Powell didn’t endorse crypto outright, his acknowledgement of its role in the financial system represented a major shift from previous skepticism.

As we at Outset PR observed, Powell’s shift reflects a broader trend—not just regulatory acceptance but also a fundamental change in how traditional financial institutions perceive digital assets.

This meeting was also the first since President Donald Trump returned to office, having clearly stated his desire for lower interest rates. While the Fed has historically operated independently of the White House, Trump has openly challenged its authority:

“I think I know interest rates much better than they do, and I think I know it certainly much better than the one who’s primarily in charge of making the decision.”

Despite this potential for conflict, Powell has been deliberate in maintaining the Fed’s independence, refusing to engage in Trump’s rhetoric on interest rates. When asked in November whether he would resign if Trump requested it, Powell responded with a firm “no”, adding that demoting Fed officials from their governorships is not permitted under the law.

Fed opens doors to crypto banking

Powell’s crypto-related remarks were particularly noteworthy, as he directly stated that U.S. banks are allowed to serve crypto clients, provided they manage the associated risks properly:

“Our role with Bitcoin

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Author: Mike Ermolaev

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