Federal Reserve Vice Chair for Supervision Michael Barr pushed back on claims that the crypto industry is being shut out of the banking sector and said that the central bank doesn't discourage the activity.
Barr said the Federal Reserve tries to be "straight up the middle," when asked about the topic on Thursday by Dr. Christopher Brummer, a professor of financial technology at Georgetown Law, during an event at Georgetown Law.
"What we have said consistently is, we're trying to be straight up the middle, provide clear guidance and clear guardrails so that banks that want to engage in this activity can do that in a way that's appropriate," Barr said. "We don't tell them that they have to do it, we don't tell them they shouldn't."
The topic around crypto debanking has been cast into the spotlight, particularly over the past several weeks under the new Trump administration, as industry, lawmakers, bank CEO and regulators grapple with the issue. Crypto firms say they face challenges when looking to establish and maintain accounts in the U.S.
Coinbase took a step further and sued the Federal Deposit Insurance Corporation last year, through consultant firm History Associates, accusing the agency of trying to cut off the crypto industry from the banking sector. Big bank CEOs have since opened up about their struggles with crypto.
Barr's comments on Thursday follow statements from the top — Federal Reserve Chair Jerome Powell called for a "fresh look" at debanking during a Senate Banking Committee hearing earlier this month.
Barr, who said he would be stepping down as the vice chair of supervision later this month, said the Fed focuses on banks complying with consumer and terrorism financing protections. Barr will continue to stay on as a member of the Federal Reserve Board of Governors.
"We try to take the position, and have taken the position over all the time that I've been at the Fed — we don't tell a bank to do business with particular clients and we don't tell a bank to do business with particular clients and we don't tell a bank not to do business with a particular client," Barr said on Thursday.
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