Republican leaders on the House Financial Services Committee said the Consumer Financial Protection Bureau’s proposed rule would have an unclear impact on digital assets and wanted the agency to step aside.
In a letter to CFPB Director Rohit Chopra on Tuesday, the lawmakers said it was not clear whether the rule, titled ‘Defining larger participants in the general-purpose digital consumer payment applications market,’ would apply to specific digital asset companies. It was signed by House Financial Services Committee Chairmen Patrick McHenry, R-N.C., French Hill, R-Ark., and Mike Flood, R-Neb. letter Other concerns about the rule were also raised.
“Before finalizing the rule, we urge the CFPB to provide sufficient justification demonstrating the need for the proposed rule,” they said. “The justification must include a more detailed analysis of the scope of the proposed rule and its impacts. Without such justification, the CFPB should forgo final determination of the rule.”
This rule was first proposed in . November The CFPB will have the ability to oversee “large non-bank entities” that provide services such as digital wallets or payment apps. The rule requires nonbank financial companies that process more than 5 million transactions annually to follow the same rules as large banks and credit unions, the CFPB said. The comments are as follows: due to January 8th
Historically, many Republicans have not been fans of the CFPB, which was created in 2011 under the Dodd-Frank Act and tasked with overseeing financial services provided to consumers.
“The bureau’s approach creates more regulatory uncertainty that could undermine the functioning of the digital asset industry as it relates to digital asset trading,” the three lawmakers said in the letter.
Representatives McHenry, Flood, and Hill expressed concerns about the CFPB’s proposed rule. This despite the fact that the rules explicitly state that fiat-to-crypto and cryptocurrency-to-crypto transactions on exchanges will not be included in the rules.
“It is unclear whether this exclusion will completely exempt digital asset exchanges or only those providing services limited to fiat-to-crypto and cryptocurrency-to-crypto transactions,” they said. “If the latter is true, digital asset exchanges may be deterred from expanding their services to allow peer-to-peer trading through wallets hosted on their platforms.”
The CFPB told The Block it received the letter and is reviewing it.
Industry backlash
The Crypto Council for Innovation said the CFPB’s proposed rules “could strengthen regulation.” “Fragmentation,” and noted in a Jan. 9 comment letter that the rule “preempts” Congress.
“For the first time, without any direction from Congress or prior involvement from industry, the Bureau seeks to conduct a broad sweep of supervised digital asset activity that is already regulated under state and other federal systems,” CCI said. letter.
Crypto software developers and publishers should not be swayed by the proposed rules, said Peter Van Valkenburgh, director of research at Coin Center.
“A mere software publisher engages in constitutionally protected activity, expressive speech, and subjecting that individual to an oversight regime unconstitutionally burdens protected speech.” letter I sent it earlier this month.
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