Barr’s resignation is fueling speculation about a more crypto-friendly stance under the incoming Trump administration.

Barr, who has been described by digital asset advocates as an “anti-crypto regulator,” announced his resignation would take effect Feb. 28, though he will remain on the Board of Governors. President-elect Donald Trump’s advisers have been vocal about their desire to demote Barr, a move that carried legal uncertainty and threatened to embroil the Fed in a protracted dispute over its independence.

Barr’s resignation arrives at a pivotal time for the crypto industry, which has seen mixed signals from the central bank. Federal Reserve Chair Jerome Powell has repeatedly emphasized that the Fed does not plan to hold bitcoin, nor does it seek a legal path to do so. Skepticism over cryptocurrencies has also been evident in the Fed’s caution regarding banks’ interactions with digital assets. Some policymakers have argued that such interactions carry risks, including concerns about volatility, intransparency, and the potential for illicit activity. Nevertheless, industry leaders are optimistic that a shift in leadership at the nation’s top bank regulators could pave the way for more permissive policies.

Trump’s policy proposals include a call to create a strategic bitcoin reserve, an idea that has drawn both enthusiasm and concern in financial circles. While proponents argue that formalizing bitcoin within the United States’ reserve framework would solidify the country’s leadership in digital assets, critics maintain that the cryptocurrency’s volatility undermines its suitability as a stable reserve asset. 

Betting markets suggest a Bitcoin Reserve remains a strong possibility under Trump

Industry watchers have also floated the possibility of executive orders on day one of Trump’s presidency, aiming to ensure that cryptocurrency firms are not denied access to traditional banking services. Such measures would align with Trump’s pledge to end what some crypto advocates describe as “debanking” under previous administrations.

Meanwhile, Barr’s exit clears the path for Trump to select a new Vice Chair for Supervision. Observers note that current Fed Governors who have shown more openness toward fintech and digital assets could be contenders for the role. However, the agency’s independence may limit the immediate effect of any White House directive seeking to soften crypto regulations. Still, crypto industry participants interpret Barr’s departure as another sign of waning influence among officials perceived as hostile to digital assets.

Beyond Barr’s resignation, the Fed has indicated it will not take up major rulemaking until a successor is confirmed, fueling speculation that stricter capital rules for large banks—some of which have digital asset divisions—may be delayed or abandoned. Major U.S. lenders saw a bump in their share prices following the resignation news, reflecting broad expectations that bank-friendly, or at least less restrictive, policies might follow a leadership overhaul.

Market analysts suggest that even if the incoming administration issues executive orders supporting cryptocurrencies, substantial policy changes will require cooperation from lawmakers, regulators, and the broader financial ecosystem. Trump’s team has highlighted plans to nominate a so-called “crypto czar,” strengthening a view that the next four years may bring rapid shifts in federal oversight of bitcoin and digital assets.

For the industry, Barr’s decision to relinquish his regulatory post is a watershed moment. Cryptocurrency advocates see an opportunity for more favorable banking access and a potential break from the clampdowns that marked the Biden era. Yet questions persist about whether any White House plan to establish a sizable bitcoin reserve could pass muster in Congress or the courts. With the Fed board retaining a Democratic-leaning majority until at least 2026, immediate sweeping reforms may be challenging to implement.