Michael Barr, the vice chair for supervision at the U.S. Federal Reserve, is stepping down. His last day will be February 28, 2025, or sooner if a successor is named.

In a recent announcement, Barr explained, “The position of vice chair for supervision was created after the Global Financial Crisis to ensure more responsibility and transparency. I believe the risk of a dispute over this role could distract us from our mission. I think I can serve the American people better as a governor.”

Jaret Seiberg, a financial policy analyst at TD Cowen, raised some concerns. He noted that Barr’s resignation might signal a trend of increasing politicization in banking regulation. He stated, “Agency heads used to stay on when the White House changed parties. That’s not the case anymore, which means banks should prepare for bigger policy shifts each time control changes.”

The vice chair of supervision is a key role. This position oversees banking regulations and influences how traditional finance interacts with cryptocurrencies. Although Barr had experience in the crypto world, including advising Ripple, his time in office has had mixed results for the industry. He has pushed for the Federal Reserve to regulate stablecoin issuers in the U.S., which has drawn criticism from some Republican lawmakers.

Senator Tim Scott from South Carolina criticized Barr for his “supervisory failures” during the bank failures of 2023. He also called out the “disastrous Basel III Endgame proposal” released that year. Scott said, “Michael Barr has not met the responsibilities of his position. I’m ready to work with President Trump to ensure we have responsible financial regulators.”

However, Seiberg believes Barr's resignation won't lead to immediate changes. The Democrats will hold a majority at the Federal Reserve until early 2026. If Trump wants to replace Barr quickly, he might need to choose someone from within the Board of Governors.

Seiberg suggested Michelle Bowman as a strong candidate. She’s a former Kansas banking commissioner and has experience in a community bank. Bowman has been with the Fed since late 2018 and often discusses bank policy, sometimes criticizing Barr’s approach to Basel III.

At the DC Blockchain Summit last year, Bowman emphasized the need for “regulatory openness” to support innovation and new technologies.

Cheyenne Ligon is part of the CoinDesk news team. She focuses on crypto regulation and crime. Originally from Houston, Texas, she studied political science at Tulane University. In December 2021, she graduated from CUNY's Craig Newmark Graduate School of Journalism, concentrating on business and economics reporting. Cheyenne does not hold significant cryptocurrency assets.