Fed's Barr Flags Stablecoin Risks, Citing Money Laundering and Financial Stability Threats

Federal Reserve Governor Michael Barr warned Tuesday that stablecoins revive the "long and painful history" of unsafe private money, arguing they can amplify bank-run dynamics, facilitate illicit finance, and transmit systemic shocks. Speaking at the Federalist Society, Barr likened today's digital dollars to the 1800s era of bank runs and said similar panic patterns surfaced during the 2008 financial crisis and the COVID-era turmoil. The remarks come as heightened scrutiny of stablecoins has slowed momentum in Congress on the Clarity Act.