CFPB Targets Tech with Crypto Asset Regulation
The Consumer Financial Protection Bureau (CFPB) has unveiled a proposal to expand its regulatory reach to include major non-bank digital wallet and app providers. This move aligns with the agency’s increased focus on sectors such as consumer reporting and automobile financing. Hence, companies handling over 5 million transactions annually could soon be under closer scrutiny.
CFPB to Enforce Crypto Asset Regulations
The CFPB has raised concerns about the risks consumers face as technological advancements blur the lines between traditional banking and payment services. Consequently, entities like PayPal, Apple, and Google may change their operational landscape as the agency seeks to impose stricter regulations. Moreover, with the proposed changes, “funds” would encapsulate crypto assets, bringing them within the agency’s purview for retail transactions.
The lack of consumer protections in the digital app space, such as deposit insurance, has prompted the CFPB to act. Additionally, the agency aims to close gaps, allowing regulatory arbitrage and ensuring that Big Tech firms adhere to similar standards as traditional financial institutions.
New CFPB Rule Excludes Fiat Crypto
This proposed rule comes after months of groundwork laid by the CFPB, including public warnings about the lack of deposit insurance for mobile payment apps and vocal criticisms of Big Tech’s role in the payments system by CFPB Director Rohit Chopra. Moreover, the rule targets retail crypto transactions, excluding the purchase or sale of crypto with fiat currencies and the exchange between different crypto types.
As the CFPB progresses with its proposal, large tech companies may need to prepare for an adjusted regulatory environment. This could involve significant changes in how they protect consumer data and handle transactions. Hence, the landscape of digital transactions is poised for a transformation that places consumer safety at its core.
Read Also: Federal Reserve Vice Chairman Calls for Private Stablecoin Regulation
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