The US Federal Reserve Board said today that Michael Barr will step down as vice president of banking supervision, although he will continue his duties as a member of the Federal Reserve Board of Governors, meaning there will be no new vacancy. on the seven-member board of governors.
As the Federal Reserve’s chief banking regulator, the vice president for supervision has a fundamental role in financial regulation, including the cryptocurrency sector in the United States.
So Barr made a significant impact with his rigorous approach to stablecoin regulation. Additionally, he was widely recognized as a key figure in restricting banks from offering custody services for bitcoin and other digital assets.
“Barr has failed in his duty,” said Senator Tim Scott, criticizing Barr for its “failure in bank failures in 2023.” The banking supervisor supported a bill that would ban all stablecoins except those of federal banks, and pushed for the Federal Reserve to control and enforce the law against issuers of stablecoins. stablecoins.
The same way, Barr addressed the idea of a central bank digital currency (CBDC) in the US., saying that the Federal Reserve is still completely in the research phase.
However, now, when it is reported that he will resign on February 28, or sooner if a replacement is named, it is added that Barr made his decision to prevent a possible conflict with the incoming administration in the United States. His decision means Trump will have to choose his replacement from among the seven current Fed governors, unless one of them chooses to voluntarily resign before his term expires.
“The vice president of audit position was created to create transparency and accountability in the wake of the global financial crisis,” Barr said. “However, any disagreement on this position could be detrimental to our mission,” he added. His mandate did not expire until July 2026and had previously told Congress that he intended to remain in the position.
In reality, Barr’s decision aligns with the Trump administration’s desire to make rapid changes and will need to nominate a candidate within the Board of Governors who is more in tune with his own views on banking regulation.
His successor must be officially nominated by Trump after he takes office on January 20, and then confirmed by the Republican-controlled US Senate.
According to diverse opinionsMichelle Bowman, a governor who has consistently opposed attempts to enact stricter banking regulation, She would be the main candidate to fill Barr’s position.
According to The Block, the Federal Reserve said that he does not plan to take on significant rulemaking until Barr’s successor is confirmed. Barr’s departure therefore clears the way for the Trump administration to begin working on a more industry-friendly agenda.
At the Blockchain Summit event held last year, Bowman said that “regulators have to recognize that change has to happen and we have to be willing to work with institutions and with technology providers to create an environment that can facilitate safe and robust adoption and integration with the world of cryptocurrencies.”
At the time, Bowman also said, “I think there are opportunities to interact directly with the industry to try to better understand the technologies and the benefits they can provide and then also try to understand what risks might be presented and how they might be mitigated.”
