CFPB excludes cryptocurrency wallets from ‘Larger Participants’ regulation
Good news for crypto wallet users! The Consumer Financial Protection Bureau (CFPB), a US financial regulator, has finalized its rules on the “Larger Participants” criteria for digital payment platforms. In an exciting twist, the agency has decided to exclude the transfer of crypto assets from this rule.
What does this mean for you? Well, digital wallets like Apple Pay and centralized peer-to-peer payment services will still be subject to the rule, but only for transactions denominated in US dollars. The CFPB clarified that transactions involving digital assets, such as Bitcoin and stablecoins, are not included in the rule.
Industry players like research-based investment firm Paradigm and pro-crypto nonprofit groups played a key role in influencing this decision. They successfully advocated for the exclusion of digital asset transactions from the rule.
The CFPB began focusing on digital payment services like Apple Pay and Venmo in September 2023 out of concern for potential monopolistic issues with Big Tech companies and the monetization of consumer data. Initially, the agency even proposed supervising crypto wallet providers, but this faced resistance from the crypto industry and lawmakers.
In January 2024, US lawmakers expressed their concerns about the impact of the rule on cryptocurrencies, highlighting the importance of peer-to-peer transactions through self-hosted wallets in the digital asset ecosystem.
Despite these challenges, the CFPB stayed the course and continued to address issues in the cryptocurrency space. In April 2024, the agency even took aim at blockchain video games, concerned about in-game asset tokens being traded outside of the gaming ecosystem.
So, while crypto wallets may be excluded from the Larger Participants rule, it’s clear that the CFPB remains vigilant in regulating the digital payment landscape. Stay tuned for more updates on this evolving regulatory environment!