Michael Barr Resigns from Federal Reserve, Impacting Crypto Regulation Policies
Michael S. Barr, Vice Chair for Supervision at the Federal Reserve, has announced his resignation but will remain on the Fed's Board of Governors until further notice. Barr is known for his anti-crypto stance, being instrumental in regulatory crackdowns on stablecoins and opposing a US Central Bank Digital Currency (CBDC). His departure may alleviate concerns about stringent regulatory changes during President Biden’s final months in office.
Barr’s resignation will take effect on February 28 or upon the appointment of a successor. His term as Board Governor extends until 2032. He emphasized his commitment to public service, indicating that leaving his leadership role would prevent distractions from the Fed's core mission.
During his tenure, Barr aligned with Senator Elizabeth Warren's anti-crypto views, leading efforts to restrict stablecoin activities and keep cryptocurrencies out of traditional banking. In early 2024, despite some support for a CBDC within the Fed, Barr was a prominent opponent, hindering progress towards a US digital dollar.
Critics, including financial analyst Caitlin Long, have labeled Barr's tenure as ineffective and excessively restrictive. His removal was anticipated if Trump returned to office due to policies perceived as anti-crypto, often termed "Operation Choke Point 2.0."
Despite Barr's exit, the Federal Reserve will continue to influence the financial industry's relationship with cryptocurrencies. Fed Chair Jerome Powell recently compared Bitcoin to gold, reflecting a more neutral stance than Barr's hardline approach. Powell’s monetary policies have also indirectly supported the crypto market.
President-elect Trump plans to reform financial regulators' approaches to cryptocurrency, initiating changes in key regulatory positions to foster a more favorable environment for digital assets. However, Barr’s departure raises questions regarding the Fed's future actions in crypto oversight.
In his farewell remarks, Barr stated that the Federal Reserve will not pursue any major new regulations until his successor is appointed, pausing significant policy changes during President Biden’s remaining time in office. While other agencies may continue advancing anti-crypto initiatives, the Fed is expected to remain inactive on such matters until a new administration is established.
The exit of this polarizing figure could signal a turning point for crypto regulation in the US. The long-term stance of the Federal Reserve remains uncertain, but many in the industry view Barr's departure as an opportunity for more balanced policies ahead.