Crypto opponent Michael Barr steps down

Michael Barr, Vice Chair for Supervision at the U.S. Federal Reserve (Fed), will step down from his position on February 28, 2025, or earlier if his successor is appointed before that date. However, he will continue serving on the Fed's Board of Governors.

Barr became well-known for his strong remarks against cryptocurrencies. In 2023, he stated that banks would likely find it unsafe and imprudent to hold crypto-assets on their balance sheets. These comments solidified his reputation as a critic of the crypto industry.

Operation Chokepoint 2.0

Blockchain industry leaders consider Michael Barr a key figure in Operation Chokepoint 2.0—a campaign to push crypto companies out of the banking system. Senator Cynthia Lummis accused him of undermining trust in regulators, while Custodia Bank CEO Caitlin Long called Barr the “Fed’s chief debanker.”

What does the crypto community say?

Many in the crypto industry welcomed the news of Barr’s departure. Nic Carter, a partner at Castle Island Ventures, noted that more than half of the key figures in Operation Chokepoint 2.0 have already stepped down or announced their departures. These include FDIC Chair Martin Gruenberg and SEC Chair Gary Gensler.

However, not all of Barr’s actions were met with disapproval. His stance on stablecoin regulation was considered constructive, and his research on central bank digital currencies (CBDCs) helped advance discussions on this technology in the U.S.

Officials have not confirmed the existence of Operation Chokepoint 2.0, but a court has ordered the FDIC to provide Coinbase with documents that could shed light on regulators’ roles in restricting the crypto industry. Former U.S. prosecutor John Deaton warned that the impunity of such actions could set a dangerous precedent for innovative sectors.