How Companies Like PayPal, Jack Dorsey's Block Could Be Impacted by CFPB Plan

The State of crypto is presented by Tron connecting the world to the power of Cryptocurrency, the Consumer Financial Protection Bureau. The CFP B wants to expand its oversight to cover non-bank payment providers and some sub sectors of crypto transactions. Joining us now to discuss is Coin Desk, global policy and regulation, managing editor Nick Day, former courtroom sketch artist and Saman Man Fried's shadow, who was also the editor of coin desk state of crypto newsletter. Welcome back from Samland, Nick. Get you back. How's it going? Oh, yeah, welcome to Earth. I I, you know, things are great. So tell us um a little bit about this proposal, first of all, how it would be implemented and second of all, what it actually is changing. Yeah. So this is a proposal from the CFP B yesterday, basically uh trying to treat non-bank uh payment providers uh app providers, for example, uh similarly to banks is, you know, kind of how the uh document that describes it. So basically putting uh making sure that you have the same rules kind of applying to I you know, it didn't name them, but a footnote suggested companies like paypal with Venmo, uh block with the Cash app, uh companies like that, making sure that they're operating under the same kind of, you know, general oversight rules that you might see large financial institutions and banks uh operating under. And, um, you know, as part of that, they were kind of defining, you know, how they're looking at these. So, what they're doing is creating this kind of definition of a consumer payment, uh that would include, you know, payments within households to other people uh strictly, you know, not necessarily things that are meant for commercial purposes. So, uh you know, I think, for example, um you know, if I'm buying a pizza and I'm using Venmo to pay someone back for it, that seems to be the kind of transaction that might be covered some terms of transactions therefore, might get caught up in that under just how they're defining the terms. So this, who actually would approve this, this sounds like an expansion of power, of course, that freaks out a lot of people in crypto. So who would, who would approve this and how would it get implemented? Well, the CFP B is doing this kind of like a rulemaking. So uh they propose this, they're seeking feedback, they're giving people uh either 30 days or until January, whichever is later to respond to the proposal and say, OK, we agree or we disagree or we have concerns about XYZ processes, but it's a rulemaking process similarly, to how, for example, the Treasury and the IRS are putting out a rule for, you know, a defining broker for, uh you know, tax purposes or for how, uh you might see federal regulators implement other rules. Um So it would be ultimately the CF TB that's going to do this, I imagine though, you know, of course, uh CF TB in particular is uh the agency that kind of gets a lot of these challenges. So I imagine there'll probably be a lawsuit. It is worth noting, interestingly enough that the Bank Policy Institute uh you know, a bank friendly entity uh did come out in favor of this proposal. Um So it, it does have some support. You did see opposition from folks like Congressman P Penry who uh you know, has also returned to his uh normal job of running the hospital services committee after a brief stint, uh you know, not doing that. So uh it is, it, it is gonna be one of those rules. I think that we're gonna see a lot of discussion about. All right, Nick, we are gonna have to leave it there. Thanks so much for joining this morning and how refreshing it is to talk about something that's not Sam B and freed in court for five weeks straight. So thank you for bringing us and just the sketches, just some pictures. Sure. All right. That was Coindesk global policy and regulation. Managing editor Nick Day. Don't forget to sign up for the state of crypto newsletter on coindesk dot com.