CFPB Could Demand Consumer Protections for Digital Wallets

The Consumer Financial Protection Bureau (CFPB) has published a set of proposals that could impact cryptocurrency users.

Its 870-page report, published 13th November, is largely focused on prepaid debit cards, but some provisions in the document may apply to cryptocurrency wallets too.

Regulations may apply to all digital wallets

The bureau is still seeking comment on its proposed definition of ‘prepaid accounts’ and admits that the document remains a work-in-progress.

While most of its proposal deals with cards, however, the CFPB notes that it could apply to digital currencies as well:

“The Bureau also recognizes that the proposed rule may have potential application to virtual currency and related products and services. As a general matter, however, the Bureau’s analysis of mobile financial products and services, as well as and virtual currencies and related products and services, including the applicability of existing regulations and this proposed regulation to such products and services, is ongoing. The proposed rule does not specifically resolve these issues.”

There are significant variations in the way digital wallets hold funds and process payments, the CFPB states.

Most allow users to store their bank account, debit card, credit card or prepaid credit card credentials on mobile devices. Some allow consumers to store funds directly, or by funding a prepaid product that can be used to withdraw funds, it says.

CFPB already accepts digital currency complaints

The bureau issued an advisory on digital currencies back in August, warning US consumers about the potential dangers of the bitcoin ecosystem. It also began accepting consumer complaints regarding digital currencies.

At the time the CFPB told CoinDesk that it was actively working to understand how digital currencies and other emerging technologies affect consumer protections. The bureau said it would continue to carefully monitor the development of digital currencies and take appropriate steps if necessary.

Judging by the latest set of proposals, the bureau has not changed its position on digital currencies – they remain under examination.

Mobile image via Shutterstock.com