Michael Barr of the Federal Reserve to step down amid crypto concerns

Michael Barr, Vice Chair for Supervision at the U.S. Federal Reserve, has announced that he will resign, effective February 28, 2025, or earlier if a successor is appointed.

His resignation is seen as part of a broader shift, with some linking it to "Operation Chokepoint 2.0," a federal initiative aimed at reducing banking services for cryptocurrency firms.

Barr's resignation follows a speech in March 2023, where he stated that the Federal Reserve would view it as "unsafe and unsound for banks to directly own crypto-assets on their balance sheets."

This position has been cited by many in the crypto industry as a key reason why U.S. banks have been hesitant to offer services to crypto companies.

Barr's role has attracted criticism from various crypto figures.

U.S. Senator Cynthia Lummis expressed frustration with Barr’s tenure, accusing him of enabling "Operation Chokepoint 2.0" and harming Wyoming’s digital asset industry.

Custodia Bank CEO Caitlin Long also criticised Barr, calling him "THE FED’S DEBANKER-IN-CHIEF," while Nic Carter of Castle Island Ventures welcomed his departure, noting that more regulatory leaders have stepped down under the Biden administration.

Despite the criticism, Barr’s time at the Federal Reserve also included efforts to regulate stablecoins, which some see as essential for the future of cryptocurrency in the U.S.

He also supervised the Fed's research into central bank digital currencies (CBDCs).

While U.S. officials have not officially confirmed the role of Operation Chokepoint 2.0 in the crypto industry’s struggles, a recent court order has allowed crypto exchange Coinbase to access unredacted files from the FDIC to investigate its involvement.

Barr's resignation adds to a growing list of departures in financial regulatory bodies, signaling a potential shift in how the U.S. government may approach crypto regulation in the future.