Lawmakers debated the Consumer Financial Protection Bureau’s (CFPB) proposal to regulate payment apps, including those dealing with cryptocurrency.
The proposal targets nonbank companies processing over five million transactions yearly, mirroring bank regulations. Some House Financial Services subcommittee members, like Rep.
Mike Flood, raised concerns about the CFPB’s authority over crypto, questioning its legality. On the other hand, Democrats such as Rep. Stephen Lynch supported CFPB oversight due to crypto’s volatility causing investment losses.
The rule, which mentions cryptocurrencies multiple times, faced criticism for potentially expanding CFPB’s jurisdiction into crypto transactions and self-hosted wallets. Witnesses and lawmakers, including Rep. Patrick McHenry and Rep.
French Hill, expressed worries about the rule’s vague implications for digital assets. Amid calls for regulatory clarity for crypto firms, Rep. Warren Davidson highlighted challenges in getting clear guidance.
Law professor Christopher Odinet advocated for bringing cryptocurrencies under CFPB supervision, citing the collapse of FTX as an example of the risks associated with crypto transactions and consumer assets handling.
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