Michael Barr, Vice Chair for Supervision at the Federal Reserve Bank, spoke in New York about issues related to debanking and cryptocurrency regulation.
Responsible Bank Engagement in Crypto
Barr emphasized that the Federal Reserve does not discourage banks from engaging with crypto, as long as they comply with regulations such as anti-money laundering and consumer protection. "We strive at the Fed to play straight up the middle on these issues. Our expectation is that banks engage in digital assets safely and soundly."
Michael Barr's Role in Regulation
Barr highlighted the supervision program for institutions dealing with digital assets. Some banks managed this sector well, while others encountered liquidity and compliance issues that led to their downfall.
Barr's Departure and Implications for the Federal Reserve
Barr announced last month his departure on February 28, enabling Donald Trump to replace him. Despite leaving the position a year early, Barr intends to remain on the Fed’s Board of Governors until 2032. His exit adds uncertainty to future capital requirements for banks aimed at preventing crises.
Michael Barr played a crucial role in shaping the Federal Reserve’s approach to crypto regulation and the banking sector. His departure creates uncertainty in the regulatory landscape but also opens opportunities for new leadership.
