According to Cointelegraph, the United States Consumer Financial Protection Bureau (CFPB) has proposed a rule that would allow it to supervise large non-bank digital wallet and app providers. This proposal is part of a broader move by the agency to extend its supervision to various sectors, including consumer reporting, consumer debt collection, student loan servicing, international money transfers, and automobile financing. The rule would apply to companies handling over 5 million transactions per year, such as PayPal, Apple, Amazon, Google, and Meta.
The CFPB stated that Big Tech and other companies operating in consumer finance markets blur the traditional lines separating banking and payments from commercial activities, which can put consumers at risk. CFPB director Rohit Chopra said the rule would crack down on one avenue for regulatory arbitrage. The agency noted that digital apps have at least as many users as credit and debit cards but currently lack protections such as deposit insurance and privacy and consumer rights guarantees.
The proposed rule specifically targets crypto wallets by suggesting that the definitions of 'funds' should be extended to crypto assets in line with other federal statutes. The rule is aimed at transfers of funds for retail purchases and the purchase or sale of securities or commodities. The rule would mainly apply to the retail use of crypto, as the purchase or sale of crypto with fiat currency and the exchange of one type of crypto for another would be excluded. The CFPB has been building up to this rule proposal for months, releasing a warning in June that many mobile payment apps do not have deposit insurance and expressing concerns about the role of Big Tech in the U.S. payments system.