The Resignation of Michael Barr: A Shift in the Federal Reserve’s Crypto Stance?
The Background
Michael Barr, the Vice Chair for Supervision at the US Federal Reserve, is set to resign from his position. This development has sent shockwaves through the crypto community, with some viewing it as a positive step towards a more favorable regulatory environment.
The Resignation Letter
Barr’s resignation will take effect on February 28 or earlier, if a successor is appointed. He had informed President Joe Biden of his decision in a January 6 letter, stating that he would continue to serve as a member of the Federal Reserve Board of Governors.
The Controversy Surrounding Operation Chokepoint 2.0
Operation Chokepoint 2.0 refers to a purported federal effort to debank crypto companies. Some industry executives have linked Barr to this initiative, citing his speech on March 9, 2023, in which he stated that the central bank would view it as "unsafe and unsound" for banks to directly own crypto-assets on their balance sheets.
Crypto Industry Reaction
The resignation of Michael Barr has been met with a mix of emotions within the crypto community. Senator Cynthia Lummis described him as having "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."
Caitlin Long, CEO of Custodia Bank, referred to Barr as "THE FED’S DEBANKER-IN-CHIEF," calling him one of the architects of Operation Chokepoint 2.0. Nic Carter, a partner at Castle Island Ventures, created a wanted poster of public figures he held responsible for Operation Choke Point 2.0, with over half of them announcing their resignations or being defeated in elections.
The Context
The Federal Reserve’s stance on crypto has been a subject of discussion in recent times. Michael Barr, who previously served as an adviser at blockchain payments firm Ripple, pushed for responsible stablecoin regulation. This is 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. While officials haven’t confirmed their involvement in debanking the crypto industry, a recent court order allowed Coinbase to obtain unredacted files from the FDIC to investigate its role in Operation Chokepoint 2.0.
Operation Chokepoint 2.0: What is it?
A coordinated effort has been alleged to have taken place to stop various crypto activities, including basic BTC transactions and more complex offerings. Coinbase’s chief legal officer, Paul Grewal, explained that the filings showed a clear attempt to suppress crypto activity.
The Future of Crypto Regulation
The resignation of Michael Barr has raised hopes for a more favorable regulatory environment in the US. Former US prosecutor John Deaton has offered to lead an investigation into Operation Chokepoint 2.0 for the incoming Trump administration.
"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 January 4 X post.
The Impact of Barr’s Resignation
Michael Barr was appointed as the Federal Reserve vice chair for supervision in July 2022. His role was created after the Global Financial Crisis to provide responsibility, transparency, and oversight of the financial system.
While his resignation is seen as a positive step by some, others are skeptical about the impact it will have on crypto regulation. The incoming Trump administration may bring about changes in the Federal Reserve’s stance on crypto, but only time will tell.
The Path Forward
As the crypto industry continues to navigate the complex regulatory landscape, one thing is clear: the resignation of Michael Barr marks a shift in the Federal Reserve’s stance on crypto. Whether this change will be positive or negative remains to be seen.
However, with former US prosecutor John Deaton offering to lead an investigation into Operation Chokepoint 2.0, there is hope that the truth about this alleged coordinated effort to suppress crypto activity will finally come to light.
Conclusion
Michael Barr’s resignation from his position as Vice Chair for Supervision at the Federal Reserve has sent shockwaves through the crypto community. While some view it as a positive step towards a more favorable regulatory environment, others are skeptical about the impact it will have.
One thing is certain: the resignation of Michael Barr marks a shift in the Federal Reserve’s stance on crypto. Whether this change will be positive or negative remains to be seen, but one thing is clear – the future of crypto regulation is uncertain and will likely continue to be a subject of debate for months to come.
Related Articles
- How Crypto Laws are Changing Across the World in 2025
- The Death of Meta’s Stablecoin Project was ‘100% a Political Kill’ — Ex Diem Boss
- Crypto Regulations: A Guide to Navigating the Complex Landscape