Trump Appoints New Federal Reserve Board Member, Favourable Information for the Encryption Industry

This Thursday, near the close of Wall Street, Trump announced the appointment of Stephen Milani as a Federal Reserve Board member, replacing the outgoing Adriana Kugler, with a term set to last until January 31, 2026. Some analysts believe this is not only to fill a vacancy but also a political signal.

Will Milan's "Federal Reserve audition" become an unexpected booster for the encryption industry? What does Trump's move mean in the context of the Federal Reserve's interest rate cut expectations and the weakening trend of the US dollar?

Introduction to Milan: From Harvard to the White House's encryption "Allies"

Milan has an economics background from Harvard University and his career spans the fields of investment and policy. He has worked at several investment firms, including a company involved in creditor trading after the bankruptcy of FTX. After joining Trump's camp in 2023, Milan quickly emerged and was appointed Chairman of the White House Council of Economic Advisers in March 2025.

As a conservative economist, Milan supports Trump's tariff policy, advocates for lower interest rates, and reassesses the strong dollar policy. In the field of encryption, he shows an open attitude. In December 2024, Milan stated in a financial podcast that perhaps a significant simplification of regulations should be considered to truly enable innovative industries like encryption to take root.

Milan does not blindly support the encryption industry; rather, he opposes the current situation of fragmented regulation, redundant approvals, and legal ambiguity. He advocates for a more coordinated regulatory framework that provides entrepreneurs with a clear compliance roadmap. This viewpoint aligns more closely with the stance of institutional compliance-oriented encryption supporters.

If Milan continues to express a favourable attitude towards the rationalization of encryption regulation during the Federal Reserve's term, it could become an important catalyst for market sentiment and even accumulate the volume of potential candidates for future positions.

Federal Reserve Policy: The "Entry" of Rate Cut Advocates

In terms of time, Milan can participate in at most three Federal Open Market Committee meetings, which have a limited structural impact on the annual interest rate path. However, in the second half of 2025, when the interest rate game becomes increasingly heated, a single vote from the council remains crucial.

Milan is a typical Trump-style economist: supporting "Made in America", questioning the strong dollar strategy, and advocating for interest rate cuts to stimulate growth. He has repeatedly pointed out that the Fed's continued high interest rate policy is extremely detrimental to American manufacturing and exports, calling for a more proactive monetary policy to complement industrial policy.

Although Milan is unlikely to change the Federal Reserve's interest rate path in the short term, if it pushes the narrative of "inflation is under control, and we should focus on employment and investment" within the Fed, it will undoubtedly provide the market with new policy imagination space. Especially against the backdrop of currently high U.S. Treasury yields and a weakening dollar index, the "return of interest rate cut expectations" is becoming a focal point of the capital market.

Since the beginning of this year, the safe-haven properties of the US dollar have faced unprecedented challenges. In the first half of 2025, the US dollar index fell by more than 10%, marking the weakest performance in the first half since 1973. The US dollar, which used to strengthen during periods of volatility in the financial markets, now rises alongside long-term US Treasury yields, exhibiting an "anomalous" characteristic typically seen in emerging markets.

Analyses indicate that Milan's challenge to the "strong dollar consensus" is forming a "new consensus prototype." He questions whether the strong dollar truly aligns with national interests and considers introducing a more flexible exchange rate mechanism for export-oriented manufacturing. Such views are gradually gaining traction within the Trump administration.

Potential Impact on the Encryption Market

For the encryption industry, Milan's temporary ascension may signify:

1. Policy environment warming: His stance has strengthened the White House's interest in encryption and may also promote clearer regulatory integration.

2. Risk asset sentiment heats up: If he promotes interest rate cuts or guides easing expectations, Bitcoin, Ethereum, and other risk assets will directly benefit.

3. The trend of the US dollar affects stablecoins and cross-border payments: A weak dollar strategy will increase the attractiveness of encryption assets in international payments.

Although Milan is not a legislator and cannot single-handedly change the Federal Reserve's course, his views have already been shaping the macro sentiment framework for the second half of 2025. This policymaker, who has an academic background, may have a stage that extends far beyond these short five months.