The U.S. Federal Reserve’s Vice Chair Michael Barr is planning to step down, which makes him the most recent American official to depart amid allegations of involvement in “Operation Chokepoint 2.0” – a supposed coordinated federal initiative aimed at discontinuing banking services for cryptocurrency companies.
Barr’s resignation will be official as of February 28, but it could happen sooner if a replacement is chosen, as stated in a letter he wrote and sent to President Joe Biden on January 6.
Barr will, however, continue to serve as a member of the Federal Reserve Board of Governors.
Certain leaders in the cryptocurrency sector believe that the statements made by Barr have contributed significantly to the reluctance of many American banks to provide services to digital currency companies, particularly following his speech on March 9, 2023 which seemed to solidify the Federal Reserve’s stance.
“We would likely view it as unsafe and unsound for banks to directly own crypto-assets on their balance sheets.”
His resignation appears to have excited some members of the crypto community.
“In a recent statement posted on January 6th, U.S. Senator Cynthia Lummis asserted that Michael Barr, serving as Vice Chair for Supervision, has consistently fallen short in fulfilling his responsibilities. According to her, these lapses have allowed Operation Chokepoint 2.0 to persist and, moreover, Barr has allegedly abused his position illegally to expand his power at the detriment of Wyoming’s digital asset industry.”
In a January 6th update on X, Custodia Bank’s CEO, Caitlin Long, labeled Barr as the “Chief Debanker of the Federal Reserve,” implying that he was one of the masterminds behind Operation Chokepoint 2.0.
The departure of this individual has also gained positive feedback from Castle Island Ventures partner, Nic Carter, who specializes in the blockchain field.
As a researcher, I observed that over half of the leadership within the regime have either tendered their resignations or already vacated their positions, with the upcoming transition from the outgoing Biden administration to the incoming Trump administration on the horizon.
Among the leaders listed are Martin Gruenberg (Chair of the Federal Deposit Insurance Corporation), Gary Gensler (Chair of the Securities and Exchange Commission), US Senator Sherrod Brown, with Massachusetts Senator Elizabeth Warren, Michael Gibson (Federal Reserve board member), and Nellie Lang (Under Secretary of the Treasury for Domestic Finance) yet to be accounted for on Carter’s list.
Nevertheless, Barr, a former advisor at the blockchain payment company Ripple, forcefully advocated for sensible regulation of stablecoins – an aspect that many experts in the field believe is crucial for the growth of cryptocurrency acceptance within the United States.
He also supervised the Federal Reserve’s research into central bank digital currencies.
Although U.S. authorities have not explicitly stated if they’re attempting to curb the cryptocurrency sector, a recent court ruling permits crypto exchange Coinbase to access unredacted documents from the Federal Deposit Insurance Corporation (FDIC) for an investigation into its involvement in Operation Chokepoint 2.0.
Paul Grewal, Coinbase’s top lawyer, stated that they were taking comprehensive measures aimed at halting diverse cryptocurrency operations. This includes simple Bitcoin transactions as well as advanced services.
John Deaton, a previous U.S. prosecutor and cryptocurrency proponent, has proposed himself to guide an investigation into Operation Chokepoint 2.0 for the incoming Trump administration.
If these actions are not opposed, they could set a harmful pattern that allows regulatory bodies to secretly hamper industries they don’t favor, thereby limiting creativity, competition, and economic growth opportunities, according to Deaton in his January 4 post on X.
In July 2022, Barr assumed the position of Vice Chair for Supervision at the Federal Reserve. This role was established post-Global Financial Crisis with the purpose of ensuring accountability, clarity, and surveillance over the financial system.
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2025-01-07 04:14