House Committee Leaders Request Clarity, Extended Commentary on CFPB's Proposed Crypto Rule
Summary:
U.S. House Committee leaders have requested an extension for public comment on a proposed rule from the Consumer Financial Protection Bureau (CFPB), citing potential ambiguities in its impact on the digital asset sector. Representatives Patrick McHenry, Mike Flood, and French Hill have urged the CFPB to clarify how the proposed rule, suggesting an expanded supervisory power over depository entities including digital assets, would apply to specific players within the digital asset field. The lawmakers also voiced concerns that unclear regulations might discourage digital asset firms from allowing peer-to-peer transactions. The officials suggest extending the public comment phase by an additional 60 days.
The heads of the US House Financial Services Committee and the Digital Assets, Financial Technology, and Inclusion Subcommittee have made an appeal for an extended period of public comment on a forthcoming rule, proposed by the Consumer Financial Protection Bureau (CFPB). They argue that the proposed rule's effects on the digital assets sector remain ambiguous. On January 30, Representatives Patrick McHenry, Mike Flood, and French Hill sent a letter to the CFPB director, Rohit Chopra, expressing their uncertainties about how the proposed legislation, set for November 2023, would pertain to specific players within the digital assets field. The proposal of the CFPB included the extension of its supervisory powers over depository institutions, incorporating digital assets into its "funds" definition, and gaining the ability to oversee wallets.
The trio of legislators expressed their concern that the lack of specific clarity for the crypto exchanges affected could discourage these firms from allowing peer-to-peer transactions through their platform-hosted wallets. They proposed that the CFPB extend the public comment section for this proposal by an additional 60 days to allow for comprehensive feedback on crypto.
The representatives' letter mentioned that "Peer-to-peer transactions through 'self-hosted wallets' is a fundamental element of the digital assets ecosystem as they remove third-party risks." It also noted that the inclusion of specific digital asset wallet providers, who don't maintain ongoing relationships with consumers, would inadvertently introduce a new level of regulatory risks, urging the CFPB to avoid establishing such a broad definition.
On January 8, the Crypto Council for Innovation voiced their "serious concerns" over the potential impact of the proposed rule on the crypto space, cautioning that it might "enhance regulatory fragmentation." The advocacy group proposed the CFPB should withhold its extension of authority over the digital asset sector and instead await Congress to provide a suitable regulatory framework.
Patrick McHenry, chair of the House Financial Services Committee, declared in December 2023 that he would not run for reelection in the new term beginning January 2025. Considering several polls, the control of the US House of Representatives in 2024, where all 435 seats will be up for election, could end up being a toss-up.
Published At
2/1/2024 12:16:39 AM
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