Michael S. Barr, the Federal Reserve’s Vice Chair for Supervision, will resign from his post on February 28, 2025, or earlier if a successor is confirmed, the Federal Reserve Board announced Monday. Barr, considered a key figure in the regulatory approach towards cryptocurrency within the banking sector, will retain his position as a governor on the Federal Reserve Board.
Barr’s resignation letter was submitted to President Joseph R. Biden. His departure comes after a tenure marked by increased scrutiny of banks and their interaction with digital assets. Some industry observers have linked Barr’s stringent oversight to the difficulties banks have faced in engaging with and providing custody services for cryptocurrencies. He is considered an ally of Senator Elizabeth Warren, a prominent critic of the cryptocurrency industry.
In a statement, Barr emphasized his commitment to the stability of the U.S. financial system. “It has been an honor and a privilege to serve as the Federal Reserve Board’s vice chair for supervision,” he stated. He highlighted the importance of the vice chair role, established in the wake of the 2008 financial crisis, in enhancing accountability and transparency within the Federal Reserve’s regulatory functions.
Barr cited the potential for disruption caused by a prolonged vacancy in the vice chair position as a key factor in his decision. “In the current environment, I’ve determined that I would be more effective in serving the American people from my role as governor,” he explained. This suggests a desire to avoid a potentially contentious confirmation process for his successor, which could hinder the Fed’s ongoing regulatory work.
The Federal Reserve Board indicated that it will postpone any major rulemaking initiatives until a new vice chair for supervision is confirmed. This signals a potential pause in the development of new regulations impacting the financial industry, including those related to digital assets.
During his time as vice chair, Barr oversaw the supervision and regulation of financial institutions under the Board’s jurisdiction. He also worked closely with other banking regulators to maintain the stability of the banking system, particularly during the period of stress witnessed in early 2023.
