Key members of the United States House Financial Services Committee and the Subcommittee on Digital Assets, Financial Technology, and Inclusion have called for an extended period for public comment on a proposed rule by the Consumer Financial Protection Bureau (CFPB). They express concerns about the potential unclear impact of this rule on the digital asset sector.
In a letter dated January 30, Representatives Patrick McHenry, Mike Flood, and French Hill addressed CFPB Director Rohit Chopra. They raised questions about the application of the CFPB’s November 2023 proposal to specific entities within the digital asset ecosystem. This proposal suggests expanding the CFPB’s supervisory authority to include digital assets as part of the definition of “funds,” potentially impacting wallet providers.
The lawmakers highlighted concerns that the proposed rule could create uncertainty for crypto exchanges, particularly regarding peer-to-peer transactions through wallets hosted on these platforms. They emphasized that peer-to-peer transactions using self-hosted wallets are vital for the digital asset ecosystem, as they reduce third-party risk. The letter cautioned that including certain digital asset wallet providers under the CFPB’s authority could introduce regulatory risks and potentially hinder the industry’s development.
The representatives requested that the CFPB extend the public comment period on the proposal by an additional 60 days. This extension would allow for more comprehensive feedback and consideration of the rule’s impact on the cryptocurrency sector.
The Crypto Council for Innovation, an advocacy group, has previously expressed “deep concerns” about the proposed rule. The group argues that the rule could increase regulatory fragmentation and suggests that the CFPB should not extend its authority over digital assets, hinting that it would be more appropriate for Congress to establish a regulatory framework.
The request comes as Patrick McHenry, chair of the House Financial Services Committee, announced he would not seek reelection in January 2025. With all 435 seats in the U.S. House of Representatives up for election in 2024, the control of the House is seen as highly uncertain, potentially impacting future legislative and regulatory actions in the digital asset space.
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