Leaders of the U.S. House Financial Services Committee and the Digital Assets, Financial Technology, and Inclusion Subcommittee have called for an extended comment period on the Consumer Financial Protection Bureau’s (CFPB) proposed rule, expressing uncertainty about its potential impact on the digital asset space. Representatives Patrick McHenry, Mike Flood, and French Hill penned a letter to CFPB Director Rohit Chopra on January 30, questioning how the proposed rule, introduced in November 2023, specifically applies to entities within the digital asset ecosystem. The CFPB's proposed rules seek to expand regulatory authority over depository institutions, including digital assets in the definition of a “fund” and allowing them to target wallets.
The lawmakers highlighted the lack of clarity on the impact on cryptocurrency exchanges and how it might hinder companies from facilitating peer-to-peer transactions through wallets hosted on their platforms. The letter urged the CFPB to extend the proposal's public comment period by an additional 60 days to gather and consider feedback on cryptocurrencies. The lawmakers emphasized that peer-to-peer transactions via "self-hosted wallets" are integral to the digital asset ecosystem as they eliminate third-party risk. The letter also expressed concern about the regulatory risks associated with acquiring digital asset wallet providers that do not maintain an ongoing relationship with consumers.
The Cryptocurrency Innovation Council, in a statement on January 8, raised similar concerns about the proposed rule's impact on the cryptocurrency space, suggesting that it could lead to increased regulatory fragmentation. The advocacy group recommended that the CFPB refrain from expanding its authority into the digital asset space and advised waiting for Congress to establish an appropriate regulatory framework. Representative McHenry, who chairs the House Financial Services Committee, announced in December 2023 that he would not seek re-election for a new term beginning in January 2025. Control of the U.S. House of Representatives is a possibility in 2024, with all 435 seats up for election, according to various polls.
