Michael Barr, the U.S. Federal Reserve’s Vice-Chair for Supervision, has decided to step down from his role before President-elect Donald Trump assumes office once again at the White House.
His leaving has prompted responses from legislators and influential figures in the crypto sector, who highlighted his contentious influence on U.S. financial regulations pertaining to digital currencies.
A Polarizing Figure in Banking and Crypto
According to a statement made on January 6th, Barr is expected to step down from his position by the end of February, but he might leave sooner if the incoming president finds a qualified replacement. Nevertheless, it was stated that Barr will continue to serve on the seven-member Federal Reserve Board of Governors as a legal scholar.
Since July 2022, Barr has held the position of Vice Chair for Supervision at the Federal Reserve. This role was established following the 2008 Global Financial Crisis to ensure greater transparency and responsibility in the oversight and governance of the U.S. central bank’s management and regulation of the nation’s financial infrastructure.
Over the course of his career, this 58-year-old individual has often found himself in disagreement with the emerging cryptocurrency sector, particularly after advocating for granting the Federal Reserve the authority to oversee and impose regulations on digital asset providers within the U.S. This includes enforcing laws against them.
Previously, Barr mentioned that the monetary power might consider it risky and unwise for banks to keep cryptocurrencies directly on their ledgers. Critics within the field argue that this viewpoint has hindered American financial organizations from participating fully in the cryptocurrency market.
It appears that newly disclosed letters from the Federal Deposit Insurance Corporation (FDIC), obtained through legal action by Coinbase, lend credence to these assertions. The leaked documents are said to expose a concerted attempt to curb or prohibit banks’ cryptocurrency-related operations, encompassing basic Bitcoin transactions, custody services, and crypto payments.
Allegations of Overreach
During a hearing at the House Financial Services Committee in November 2024, Barr and other regulators faced criticism from Representative Zach Nunn of Iowa, who alleged that they were hindering advancements in digital currency technologies.
In simpler terms, Nunn stated that during their time together, everyone has been actively opposing cryptocurrencies. As a result, the U.S. has found itself in a position where it trails other countries in the development and acceptance of digital assets.
In response to reports of Barr’s upcoming departure, Senator Cynthia Lummis from Wyoming and a supporter of cryptocurrency, made a statement claiming that the Fed governor had unlawfully expanded his authority at the expense of Wyoming’s digital asset sector. She also criticized him for neglecting his duties as Vice Chair of Supervision.
The recent resignation of a Yale graduate, who held a prominent position, marks another instance among those against cryptocurrencies stepping down. This occurred shortly after Donald Trump’s victory in the U.S. presidential election last year, which was significantly influenced by crypto. Gary Gensler, head of the Securities and Exchange Commission (SEC), made his resignation official on November 21, 2024, to preemptively avoid being dismissed by Trump during his first day in office.
Likewise, Barr mentioned the potential disagreement regarding his role, possibly with the incoming administration, as one of the reasons for his departure.
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2025-01-07 21:54