Former Ripple advisory board member Michael Barr is expected to be nominated to replace Brian Brooks as Comptroller of the Currency.
If the Wall Street Journal’s Jan. 20 report is correct, it would mean a second consecutive U.S. banks overseer will have a connection to the cryptocurrency industry.
It would also mean that the Biden Administration’s Comptroller of the Currency would have an affiliation with a company being sued by the U.S. Securities and Exchange Commission for illegally selling an unregistered security—XRP—for a period of more than seven years.
By failing to register XRP as a security, Ripple and two senior executives “deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system,” said SEC Enforcement Division Director Stephanie Avakian in a Dec. 22 statement.
Ripple CEO Brad Garlinghouse has denied the charges and said the company plans to fight the charges vigorously.
XRP’s price jumped briefly on the news of Barr’s forthcoming appointment, but quickly retreated to the $0.27 to $0.29 corridor where the No. 5 cryptocurrency by market capitalization has spent much of the past 10 days.
Big shoes to fill
Brooks resigned as acting head of the Office of the Comptroller of the Currency on Jan. 14, ending an eight-month run that saw the former Coinbase general counsel issue a number of important pro-crypto rulings. Notably granting crypto custodian Anchorage a national bank charter, and authorizing banks to use stablecoins to make payments on behalf of customers.
USDC stablecoin-issuer Circle’s CEO, Jeremy Allaire, said the significance of Jan. 6 decision “can’t be underestimated,” adding that it “paves the way for the use of leading dollar digital currencies such as USDC as a mainstream payment medium for all forms of payments and settlement.”
Brooks’ “fierce advocacy” for bringing financial technology firms into mainstream banking led financial insiders to call him “the nation’s ‘first fintech comptroller,’” according to American Banker. It was not a compliment.
How much of that advocacy Barr will bring to the office—assuming he is in fact appointed head of the Office of the Comptroller of the Currency—remains to be seen.
Barr joined Ripple’s advisory board in 2015. At the time, he said the “global payments system is badly outdated. I think innovation in payments can help make the financial system safer, reduce cost, and improve access and efficiency for consumers and businesses alike,” in a statement.
Barr was previously Assistant Treasury Secretary for Financial Institutions under president Barak Obama, where he helped write the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which enacted strong reforms of financial regulations in the wake of the 2008-2009 prime mortgage crisis.
He is currently Joan and Sanford Weill Dean of the Gerald R. Ford School of Public Policy at the University of Michigan. Barr is also a professor at its law school, where he taught financial regulation and international finance, and co-founded the school’s International Transactions Clinic.
Barr also serves as a nonresident senior fellow at the Center for American Progress, a liberal think tank based in Washington, D.C.