tl;dr
Michael S. Barr, Vice Chair for Supervision at the Federal Reserve, has announced his resignation from the third-ranking position on the Board of Governors. Despite his resignation, Barr intends to remain at the Fed until further notice. His resignation will take effect on February 28 or until a suc...
Michael S. Barr resigns as Vice Chair for Supervision at the Federal Reserve, impacting crypto regulations and US CBDC prospects
Barr's resignation effective February 28 or until a successor is confirmed, creating potential for crypto regulation changes
Barr's anti-crypto stance and impact on federal regulations, while other board members express friendlier attitudes
Federal Reserve's role in monetary policy and potential industry ally despite Barr's resignation
President Biden's lame-duck period and initiatives to stifle pro-crypto policies, with the Federal Reserve staying quiet until his term begins
Michael S. Barr, Vice Chair for Supervision at the Federal Reserve, has announced his resignation from the third-ranking position on the Board of Governors. Despite his resignation, Barr intends to remain at the Fed until further notice. His resignation will take effect on February 28 or until a successor is confirmed. Barr is considered a key figure in preventing US banks from engaging with crypto and related services. He has been known for his anti-crypto stance and has expressed hostility towards stablecoins and the integration of crypto into the banking sector. Despite his departure, the Federal Reserve's stance on major rulemakings and its impact on the crypto industry remains uncertain.
Michael S. Barr, the Vice Chair for Supervision at the Federal Reserve, announced he is resigning from this role today. Barr will no longer fill this third-ranking position on the Board of Governors, but he intends to remain at the Fed until further notice. The industry widely considers Barr as a key reason why US Banks haven’t been able to engage with crypto and related services. BARR LEAVES FED BOARD POSITION According to a recent press release, his resignation will not take effect until February 28 or until a successor is confirmed. However, even if a new Vice Chair for Supervision is found quickly, Barr will still remain on the Fed board. His term won’t naturally expire until 2032. Nonetheless, this could be an important opportunity for crypto regulation.
"It has been an honor and a privilege to serve as the Federal Reserve Board’s Vice Chair for Supervision. The risk of a dispute over the position could be a distraction from our mission. In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor," he claimed. Barr is often described as a “Warren acolyte,” in reference to the infamously anti-crypto Senator, Elizabeth Warren. Barr displayed similar hostility during his tenure on the Fed’s Board. In 2023, he led a crackdown on stablecoins and expressed a desire to “keep crypto out of the banking sector.” Additionally, although there were rumors in early 2024 that some Board members supported a CBDC, Barr was the most outspoken voice denying the possibility. Since this denial, anti-crypto legislative efforts have further stifled a US CBDC. This episode illustrates some of the obstacles to pro-crypto sentiment in federal regulators.
"Michael Barr is the last remaining Biden/Warren appointee who architected Operation Choke Point 2.0 at a federal financial agency. It was an open secret in DC that Trump was likely to fire him. He had a terrible, horrible, no good, very bad reign as Fed Vice Chair for Supervision," wrote Wall Street expert Caitlin Long (formerly Twitter).
However, the Federal Reserve functions as the US Central Bank, with a key role in monetary policy. It still can be a powerful industry ally. Barr is only one of seven board members, and some of them have expressed at least somewhat friendlier attitudes. For instance, Fed Chair Jerome Powell compared Bitcoin to gold one month ago. Many of his recent interest rate policies have particularly benefitted the industry. Additionally, President-elect Trump vowed to overhaul regulators’ crypto treatment, and he has already replaced important figures at several agencies. Most importantly, Barr claimed in his statement that “the Board does not intend to take up any major rulemakings until a vice chair for supervision successor is confirmed.” In President Biden’s lame-duck period, there are already a few major initiatives to stifle Trump’s pro-crypto policies. The Federal Reserve, however, will stay quiet until his term begins.
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