A former adviser at Ripple, behind the popular altcoin XRP, has been appointed to the US Federal Reserve (FED). Here are the details…
Former advisor to popular altcoin Ripple is now at the FED
Michael Barr, a former Ripple adviser, won Senate confirmation to become vice chairman of audit at the Fed. Thus, it is preparing to assume one of the most important US regulatory roles. A key Treasury Department official during the administration of former President Barack Obama, Barr will take over as the leading U.S. banking watchdog, where he will have a say in how the traditional financial system interacts with cryptocurrencies (especially stablecoins).
President Joe Biden nominated Barr for the strongest job in financial regulation in April. The Senate approved his nomination Wednesday by a vote of 66-28. The Fed oversees Wall Street banking. Since the 2010 Dodd-Frank Act, it also has a mandate to oversee non-bank financial firms that play a huge role in the financial system. While technically he will be surpassed by Fed Chairman Jerome Powell, the chairman has publicly announced that he will delay the vice chairman on matters of financial oversight.
Barr will have an influential voice in global standard-setting organizations and in his home country, the US Financial Stability Oversight Council, which is considering how to approach stablecoins. If this council of institution chiefs officially declares tokens as a systemically important financial activity, the group could force member institutions such as the U.S. Securities and Exchange Commission (SEC) to regulate it. The Barr designation also comes after the TerraUSD boom, which prompted the government’s effort to put up barriers.
Barr’s cryptocurrency history
Barr, who is currently dean of the school of public policy at the University of Michigan Law School, will come to the Fed with a significant crypto background, serving on the advisory board at Ripple Labs. When he took the job in 2015, he said he thought “innovation in payments can help make the financial system more secure, reduce costs, and increase access and efficiency for consumers and businesses.”
Barr is widely seen as a consumer advocate who favors aggressive regulation and favors individuals’ interests over financial firms. A 2020 article cited research showing that assets like Bitcoin (BTC) “not only incur large mining costs, but are also inefficient in their long-term design.”
During his tenure, the Fed is expected to decide whether to issue a digital dollar, a move that could send shock waves through the crypto industry. Barr’s academic work suggested that a central bank digital currency (CBDC) could boost government financial inclusion goals. If such a CBDC is produced, its impact on private, dollar-based stablecoins could be profound.
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