US Federal Reserve Chairman Michael Barr is stepping down from his position as Deputy Chairman for Supervision

Michael Barr, the US Federal Reserve’s vice chairman for oversight, will step down on February 28 – or sooner, if his successor is confirmed – according to an announcement on Monday from the Fed.

Barr will continue to serve as a member of the Federal Reserve Board of Governors.

In a statement included in the Federal Reserve’s announcement, Barr indicated that he had decided to resign voluntarily to avoid a potential conflict with the incoming Trump administration.

“The position of Vice Chairman for Supervision was created after the global financial crisis to create greater responsibility, transparency, and accountability regarding the Federal Reserve’s supervision and regulation of the financial system,” Barr said. “The risk of discord over office could distract us from our mission. In the current environment, I have decided that I will be more effective in serving the American people in my role as governor.”

According to Jarrett Seaberg, a financial policy analyst at TD Coin, Barr’s decision to step down is a worrying sign of the continued politicization of banking regulation. In an analysis note to clients on Monday, Seberg wrote: “Agency heads used to stick around when the White House switched parties. That’s no longer the case, which means banks should expect greater policy volatility every time the White House changes control.”

The Federal Reserve Board’s Vice Chairman for Supervision serves as the top banking regulator and is considered one of the most important regulatory roles in the United States. In his position, Barr has had a significant impact on how the traditional financial system interacts with cryptocurrencies.

Although Barr had some goodwill in the cryptocurrency space before his appointment, including serving as an advisor to Ripple, the issuer of XRP, his tenure has been a mixed bag for the cryptocurrency industry. He was righteous Push the Federal Reserve to have the ability to regulate and enforce against issuers of stablecoins In the United States, this is something that many Republican lawmakers disagreed with.

In a statement Monday, Sen. Tim Scott (R-S.C.) criticized Barr’s “supervisory failures” during the 2023 bank failure and the “disastrous final Basel III proposal” released the same year.

“Michael Barr has failed in the responsibilities of his office,” Scott said. “I stand ready to work with President Trump to ensure responsible financial regulators are at the helm.”

However, according to Seberg, Barr’s resignation is unlikely to change much in the short term, as Democrats will continue to have a majority on the Fed until early 2026. Seberg said that if Trump wants to replace Barr quickly, he will likely have to. – Nominating a successor from within the Board of Governors.

“The logical candidate is Michelle Bowman,” Seberg wrote. “She’s a former Kansas banking commissioner who also worked at a community bank. She’s been with the Fed since late 2018. She also often speaks out on banking policy and criticized Barr’s approach to the Basel III endgame.

He spoke at the DC Blockchain Summit last yearBowman stressed the importance of “regulatory openness” to innovation and new technologies.