Federal Reserve Vice Chair for Supervision Michael Barr has urged a more nuanced approach to regulating cryptocurrencies, stating that existing financial regulations are ill-suited for the digital asset landscape. Speaking at a recent event, Barr emphasized the need for a "clear and strategic new regulatory framework" specifically designed for the crypto industry. Barr warned that banks risk becoming less relevant if they fail to engage with cryptocurrencies. He suggested that innovations like stablecoins and tokenized assets hold the potential to improve the financial system. His comments suggest a shift towards embracing responsible innovation within the crypto sector, rather than applying legacy rules. This sentiment contrasts with earlier skepticism from some regulators. The call for tailored regulations aims to foster innovation while mitigating risks, a crucial step for the long-term integration of crypto into the broader financial system. ```