Fed’s Barr: Concerned about blowback to financial system from crypto

The chief financial regulator at the Federal Reserve, Michael Barr, expressed concern about threats coming from the non-bank sector, particularly cryptocurrencies, for which the U.S. central bank and other authorities have limited sight, on Tuesday.

Barr responded to a query when testifying before the Senate Banking Committee by saying, "We're concerned about the hazards that we don't know about in the non-bank sector. "That obviously involves cryptocurrency activity, but it also broadly refers to dangers in areas of the financial system where we lack excellent sight, good openness, and good data. Risks resulting from that could affect the financial system that we do regulate.

Barr's comments, which supplemented his prepared remarks to the committee that he was keeping a watchful eye out for vulnerabilities in the financial system amid a weakening economy, were made during his first congressional testimony since taking over as the Fed's top Wall Street cop over the summer.