Former Ripple Advisor Confirmed As Top US Financial Watchdog

July 14, 2022 5:44 pm Comments

Former Ripple advisor, Michael Barr, was just confirmed as the vice chairman for supervision at the Federal Reserve which makes him one of the top financial watchdogs within the country.

In this new role, Barr will have a significant impact on deciding how cryptocurrencies interact with the traditional financial system.

This will also include the area of stable coins which many expect will have a tremendous role in how crypto becomes integrated with fiat in the future.

The fact that Barr was a former Ripple advisor could mean that the policies that are pushed out may be favorable for Ripple and the overall crypto industry.

Coindesk shares more details:

President Joe Biden nominated Barr in April for what could be the most powerful job in financial regulation.

The Senate confirmed his nomination Wednesday in a 66-28 vote. The Fed supervises Wall Street banking and – since the 2010 Dodd-Frank Act – also has a duty to oversee nonbank financial firms that play an outsized role in the financial system.

Though he’ll technically be outranked by Fed Chair Jerome Powell, the chairman has said publicly that he’ll defer to the vice chair on financial oversight matters.

Barr will have an influential voice in global standard-setting organizations and at home on the U.S. Financial Stability Oversight Council, which is considering how to approach stablecoins.

If that council of agency chiefs formally declares the tokens a systemically important financial activity, the group can push member agencies such as the Securities and Exchange Commission to regulate them. Barr will also be arriving in the wake of the terraUSD implosion, which could lend some fuel to the government’s efforts to put up guardrails.

The Federal Reserve is also expected by many to be working on a digital dollar which could completely revolutionize the entire financial system both in the US and around the world.

Such an endeavor would likely involve the use of central bank digital currencies (CDBCs) which would allow the execution of dollar based stable coins.

So far, Barr’s successful confirmation of the new role has been positively received by both the crypto industry as well as Congress, but it may be uncertain on what Barr will actually do.

There were some past records of his doubts on crypto, but his experience working at Ripple should still prove to be positive nonetheless.

CoinDesk concludes:

During his tenure, the Fed is also expected to decide whether to issue a digital dollar – a move that could send shockwaves through the crypto industry.

Barr’s academic work has suggested a central bank digital currency (CBDC) could boost the government’s financial inclusion aims. If such a CBDC is produced, its effect on private, dollar-based stablecoins could be profound.

Barr’s confirmation enjoyed wide bipartisan approval, with a number of Republicans voting to give him the job. Such an outcome wasn’t necessarily assured for this key financial post.

The previous nominee – Sarah Bloom Raskin, another Treasury veteran who had already served on the Fed board – had to withdraw after vigorous opposition.

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