Blockchain Association Rebuffs CFPB’s Proposal on Payment Apps and Digital Assets

In a elaborate critique, the Blockchain Association counters the CFPB’s latest connection to oversee integer user outgo applications, citing ineligible and jurisdictional overreaches successful the bureau’s attack to cryptocurrencies and integer assets.

CFPB Faces Criticism from Blockchain Association Over New Proposal

In November 2023, the Consumer Financial Protection Bureau (CFPB) proposed a caller rule aimed astatine bringing non-bank outgo providers and definite crypto transactions nether its oversight. The connection was ostensibly seen arsenic a measurement towards modernizing fiscal regulation, and has sparked backlash successful the crypto community.

The projected regularisation by the CFPB seeks to specify a marketplace for general-use integer user outgo applications. This would bring apps similar Venmo and different integer plus platforms nether the aforesaid regulatory scrutiny traditionally reserved for banks. The accusation for the crypto manufacture is profound, arsenic this could taxable assorted crypto transactions to accrued regularisation and oversight. The regularisation is portion of the CFPB’s effort to widen its introspection authorization implicit larger participants operating successful the integer outgo space.

CFPB requested feedback to the proposal, which the Blockchain Association, a salient radical successful the crypto sector, delivered successful a detailed 14 leafage response today. In a press release with the response, the Association summarized their position:

The Proposal, which would springiness the CFPB supervisory authorization implicit definite “general usage integer user outgo applications,” is overly wide and lacks the requisite investigation to warrant specified wide application.

The Association raised respective concerns, chiefly questioning the CFPB’s jurisdiction implicit integer assets. The Blockchain Association argues that the CFPB can’t presume authorization implicit integer assets without further rulemaking, noting that the CFPA, passed successful 2009, does not intelligibly specify “funds” to see integer assets, which emerged soon aft the Act’s inception.

The Association further contends that the connection lacks legislative past oregon lawsuit instrumentality to enactment extending the explanation of “funds” to see integer assets. They stress that specified a important hold of regulatory scope necessitates a abstracted rulemaking process nether the Administrative Procedure Act (APA) to let nationalist engagement connected this captious issue.

Beyond the jurisdictional challenge, the Association criticizes respective aspects of the proposal, recommending that its scope beryllium confined to transactions involving fiat currency only, citing the lack of a thorough interaction investigation connected integer assets, particularly those utilized for non-financial purposes similar NFTs. They besides question the projected threshold of 5 cardinal transactions for platforms to autumn nether the regulation, labeling it arsenic arbitrary and lacking justification.

Concerns are besides raised astir the proposal’s vague presumption regarding non-custodial wallets and the challenges integer plus wallet developers look successful tracking the quality of transactions. The radical calls for a much elaborate cost-benefit analysis, concluding that the existent connection fails to conscionable APA standards and risks being “arbitrary and capricious.”

In the end of a thread connected X, the Blockchain Association’s Head of Legal, Marisa Coppel, recommends, “the CFPB to see the implications of the Proposal’s exertion to integer assets and admit the Proposal’s deficiencies successful airy of APA requirements.”

Do you deliberation the CFPB is attempting to grow its powerfulness done this proposal? Share your thoughts and opinions astir this taxable successful the comments conception below.