Barr Drops a History Bomb: Stablecoins Get the 1907 Panic Warning

Fed Governor Michael Barr rolled up to a Federalist Society event this week looking like your dad explaining why the 1907 panic is totally relevant actually, invoking the Panic of 1907 to drive home a point about stablecoin regulation. Nothing says "I'm in touch with modern finance" like comparing your regulatory framework to a era when people still trusted hay as currency.

Speaking on the GENIUS Act rollout, Barr said clearer US rules could help the market grow — but warned that implementation still needs to guard against runs, weak reserves and illicit finance. The law provides "needed clarity" for issuers, he noted, but "a great deal will depend on how federal and state regulators implement the statute." Translation: Congress did the easy part, now the real fun begins.

Barr ticked off the usual suspects: money laundering risks, bank run potential and consumer safeguards still need sorting. He also highlighted how bad actors could buy stablecoins in secondary markets without identity checks, and warned issuers might stretch for yield in reserve assets in ways that undermine confidence during stress.