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CFPB Says Virtual Currencies Are Out Of Its Hands

Avatar Guest Author 3 years ago

Members of the Consumer Financial Protection Bureau (CFPB) have determined that issues surrounding digital currencies and any related products and services are outside their jurisdiction, and not liable to be covered or handled under their regulations.

The CFPB is an independent, government agency that works to protect consumer activity in financial sectors. Typically, services are limited to customers of commercial banking firms, credit card companies, payday lenders, securities firms, and mortgage and foreclosure groups. While virtual currencies continue to add to their rosters of clientele, the CFPB admits that they’re not quite ready to take on customers who delve in bitcoin, ether, or related altcoins.

The Chamber of Digital Commerce expressed enthusiasm over the ruling. Executives of the D.C.-based organization previously suggested that digital currency should not be treated like a pre-paid financial entity, and that CFPB rules held no sway over said currency’s operations:

“Virtual currencies themselves should not be regulated as a prepaid financial account. Likewise, blanket regulation of virtual wallets as such is inappropriate. The critical issue with respect to virtual currencies is understanding precisely the role of the entity and whether its ‘virtual currency activities’ actually involve the use of the virtual currency in a monetary context, whether as a medium of exchange or a store of value.”

The Chamber also commented that the CFPB was not, nor was it ever in any position to enforce any rulings pertaining to digital currency:

“Application of Regulation E and this final rule to [virtual currency] products and services is outside the scope of this rulemaking.”

Still, however, the CFPB states that it will continue to monitor virtual money in the future should anything change, and that the Chamber will strive to aid the organization and ensure future initiatives receive the attention they deserve:

“The Chamber looks forward to working with the CFPB in its efforts to gain an appropriate understanding of digital currencies and the supporting infrastructures and technologies surrounding them.”

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