#CFPB to Regulate Stablecoins#

The Consumer Financial Protection Bureau (CFPB) is proposing a new rule that would apply the Electronic Fund Transfer Act to stablecoin issuers and wallet providers. The proposal would treat stablecoins as a payment mechanism and suggests that the term "funds" in existing law should include stablecoins, as well as other similar alternative assets that can be used as a medium of exchange and to pay for goods or services. The proposal also states that the law's coverage of financial "accounts" should include "virtual currency wallets that can be used to purchase goods and services or make person-to-person transfers." Institutions that provide such accounts would be subject to regulatory requirements, including disclosures to consumers, protections against unauthorized transactions, and the ability to reverse improper transfers. The proposal is currently in a public comment period, and its finalization and implementation will depend on the Trump-appointed leadership. The Republican-led Congress also has the opportunity to use its Congressional Review Act power to erase it. Some consumer advocacy groups have praised the proposal, arguing that it would protect consumers and create a level playing field for digital payment mechanisms. But some cryptocurrency industry figures have expressed dissatisfaction with the proposal, arguing that it is too aggressive and could stifle innovation.