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Fed’s Barr once said the Federal Reserve would “likely view it as unsafe and unsound for banks to directly own crypto-assets on their balance sheets.”
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The United States Federal Reserve’s Michael Barr is set to resign as vice chair for supervision — marking the latest exit by a US official apparently linked to “Operation Chokepoint 2.0” — a purportedly concerted federal effort to debank crypto companies.
Barr’s resignation will take effect on Feb. 28 — or earlier, if a successor is appointed, he said in a Jan. 6 letter addressed to US President Joe Biden.
Barr will, however, continue to serve as a member of the Federal Reserve Board of Governors.
Barr’s resignation letter to President Joe Biden. Source: Federal Reserve
Some crypto industry executives have viewed Barr as a key reason why many US banks have been hesitant to offer services to crypto firms, especially after a March 9, 2023 speech where he seemingly confirmed the central bank’s outlook:
“We would likely view it as unsafe and unsound for banks to directly own crypto-assets on their balance sheets.”
His resignation appears to have excited some members of the crypto community.
“Michael Barr has completely failed to fulfill his duties as Vice Chair for Supervision at every turn, enabling Operation Chokepoint 2.0 and illegally increasing his power at the cost of Wyoming’s digital asset industry,” said US Senator Cynthia Lummis in a Jan. 6 post on X.
In a Jan. 6 post on X, Custodia Bank CEO Caitlin Long referred to Barr as “THE FED’S DEBANKER-IN-CHIEF,” calling him one of the architects of Operation Chokepoint 2.0.
Source: Caitlin Long
His exit has also been viewed positively by blockchain-focused Castle Island Ventures partner Nic Carter.
Carter noted that more than half of the regime’s leaders have now announced resignations or already stepped down as Biden prepares to hand over the reins to the incoming Trump administration.
Those leaders include Federal Deposit Insurance Corporation (FDIC) chair Martin Gruenberg, Securities and Exchange Commission’s chair Gary Gensler and US Senator Sherrod Brown, leaving Massachusetts Senator Elizabeth Warren, Federal Reserve board member Michael Gibson and Nellie Lang, Under Secretary of the Treasury for Domestic Finance on Carter’s list.
Source: Nic Carter
However, Barr, who previously served as an adviser at blockchain payments firm Ripple, strongly pushed for responsible stablecoin regulation — something most industry pundits agree is necessary to advance crypto adoption in the US.
He also supervised the Federal Reserve’s research into central bank digital currencies.
Related: Death of Meta’s stablecoin project was ‘100% a political kill’ — Ex Diem boss
While US officials haven’t confirmed whether it tried to choke out the crypto industry, a recent court order allowed crypto exchange Coinbase to obtain unredacted files from the FDIC to investigate its role in Operation Chokepoint 2.0.
“[There was a] coordinated effort to stop a wide variety of crypto activity — everything from basic BTC transactions to more complex offerings,” Coinbase’s chief legal officer Paul Grewal explained after reviewing the filings.
Former United States prosecutor and crypto advocate John Deaton has offered the incoming Trump administration to lead a probe into Operation Chokepoint 2.0.
“If these actions go unchallenged, it creates a dangerous precedent where regulatory bodies can quietly suppress entire industries they disfavor, stifling innovation, competition, and economic opportunity,” Deaton said in a Jan. 4 X post.
Barr was appointed as the Federal Reserve vice chair for supervision in July 2022, a role he noted was created after the Global Financial Crisis to provide responsibility, transparency, and oversight of the financial system.
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This article first appeared at Cointelegraph.com News
