Michael S. Barr is resigning as Fed vice chair for supervision, easing fears of strict crypto regulations in the final months of President Biden’s term.
Michael S. Barr, Vice President for Surveillance at the Federal Reserveannounced his resignation but will remain a member of the Fed’s Board of Governors until further notice. Known for his anti-crypto stance, Barr was a key figure behind the regulatory crackdown on stablecoins and vocal opposition to a US Central Bank Digital Currency (CBDC). His departure should ease concerns about possible harsh regulatory changes in the final months of President Biden’s term.
Barr’s resignation will officially take effect on February 28 or once a successor is named. However, his term as governor of the Board remains valid until 2032. In his statement, Barr emphasized his commitment to serving the public, suggesting that stepping back from his leadership role would prevent potential disputes from distracting the Fed from its mission main.
During his time at the Federal Reserve, Barr closely aligned himself with the anti-crypto views of Senator Elizabeth Warren. In 2023, it led aggressive efforts to limit stablecoin activities and worked to keep cryptocurrencies out of the traditional banking system. In early 2024, as rumors suggested some support for a CBDC within the Fed, Barr was the loudest voice against such initiatives. This resistance has played a significant role in blocking any progress toward a digital U.S. dollar.
Barr’s critics, like financial analyst Caitlin Long, have described his mandate as ineffective and overly restrictive. She noted that his impeachment was widely expected if Trump returned to power, given Barr’s role in perceived anti-crypto policies, often referred to as “Operation Choke Point 2.0.”
Despite Barr’s departure, the Federal Reserve remains a key institution in shaping the financial sector’s relationship with cryptocurrencies. Fed Chairman Jerome Powell recently compared Bitcoin to goldsignaling a more neutral stance compared to Barr’s hard-line approach. Powell’s recent monetary policies have also indirectly supported the crypto market.
President-elect Trump has already announced his intention to review financial regulators’ approach to cryptocurrency. His administration has begun replacing key figures at regulatory agencies, aiming to take a more favorable stance toward digital assets. However, Barr’s departure leaves an open question about the Fed’s next steps in cryptocurrency oversight.
In his farewell remarks, Barr confirmed that the The Federal Reserve will not implement major new regulations until its successor is in place. This decision effectively suspends significant policy changes during President Biden’s remaining time in office. While other agencies may continue to promote anti-crypto initiatives, the Fed will likely remain silent on these issues until the new administration takes charge.
The departure of such a polarizing figure marks a potential turning point for crypto regulation in the United States. Although the Federal Reserve’s long-term position remains uncertain, Barr’s departure is seen by many in the industry as an opportunity for more balanced policies in the future.
