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Federal Reserve Vice Chair for Supervision Michael Barr emphasized the central bank’s neutral stance on cryptocurrency banking. During an event at Georgetown Law, Barr addressed the ongoing debate over the difficulties crypto firms face in banking. He stated that the Federal Reserve aims to provide "clear guidance and clear guardrails" for banks engaging with crypto, without mandating or discouraging such activities.
The discussion on crypto debanking has gained prominence with the new Trump administration, as various stakeholders, including industry representatives, lawmakers, bank CEOs, and regulators, confront the issue.
Crypto companies have reported obstacles in obtaining and keeping bank accounts in the United States, with Coinbase (NASDAQ:COIN) even filing a lawsuit against the Federal Deposit Insurance Corporation last year through History Associates, alleging attempts to isolate the crypto sector from traditional banking.
Barr’s remarks at the Georgetown Law event echo Federal Reserve Chair Jerome Powell’s recent call for a "fresh look" at the debanking issue during a Senate Banking Committee hearing earlier in April. Powell’s and Barr’s comments indicate a willingness at the highest levels of the Federal Reserve to reevaluate the relationship between the banking sector and the cryptocurrency industry.
As he prepares to step down from his role as vice chair of supervision later in April, Barr reiterated the Federal Reserve’s commitment to ensuring banks comply with consumer protection and anti-terrorism financing regulations.
However, he made it clear that the Fed does not direct banks on which clients to serve. Barr will remain a member of the Federal Reserve Board of Governors following his departure from the vice chair position.
The recent statements from Federal Reserve officials suggest a continued focus on regulatory clarity and a balanced approach to financial innovation and consumer protection within the banking sector.
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