Michaela
Michael Barr, the United States Federal Reserve’s vice chairman for banking supervision, has announced his resignation amid discussions by President-elect Donald Trump’s advisers about potentially demoting him.
In a letter to President Joe Biden, Barr stated that his resignation would take effect on February 28. Despite stepping down from the role, Barr confirmed he would continue serving as a member of the Federal Reserve Board.
The potential decision to demote him was expected to spark a legal confrontation, raising concerns about its implications for the agency’s independence from the executive branch.
According to a source familiar with the matter, Scott Bessent, Trump’s pick for treasury secretary, reportedly asked potential financial agency candidates whether Michael Barr should or could be demoted. The source also noted that Bessent expressed support for Federal Reserve Chair Jerome Powell completing his full term.
Key Republican senators had expressed their readiness for a confrontation over Barr’s role, including Senator Tim Scott of South Carolina, who is poised to assume the chairmanship of the Senate Banking Committee this week. The committee holds oversight authority over the Federal Reserve.
“I stand ready to work with President Trump on ensuring we have responsible financial regulators at the helm,” Scott said in a statement prior to Monday’s announcement. He further noted that Barr “failed to meet the responsibilities of his position.”
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Michael Barr has been regarded by some leaders in the cryptocurrency industry as a significant factor behind the reluctance of many U.S. banks to provide services to crypto-related businesses.
This perception was reinforced by a speech he delivered in March 2023, where he appeared to affirm the Federal Reserve’s stance on the matter. “We would likely view it as unsafe and unsound for banks to directly own crypto-assets on their balance sheets,” Barr stated during his remarks.
The announcement of his resignation was met with fiery reactions from certain members of the cryptocurrency community. On January 6, U.S. Senator Cynthia Lummis took to X to criticize Barr for his role in supporting Operation Chokepoint 2.0.
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“It’s high time for the Federal Reserve to return to being accountable to the law, Congress and the American people. We need a responsible regulator at the helm, and I am looking forward to working with President Trump to make that happen,” Lummis wrote.
Nic Carter, the co-founder and partner of the venture capital firm Castle Island Ventures, also expressed approval over Barr’s resignation. In a post on X, Carter pointed out that more than half of the current leadership under the Biden administration has either resigned, stepped down, or been ousted in elections, as the incoming Trump administration prepares to take over.
The list of leaders Carter referenced includes Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg, Securities and Exchange Commission (SEC) Chair Gary Gensler, and U.S. Senator Sherrod Brown. Massachusetts Senator Elizabeth Warren, Federal Reserve Board member Michael Gibson, and Nellie Lang, Under Secretary of the Treasury for Domestic Finance, were also mentioned.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
