CFPB Proposes Enhanced Protections For Digital Wallets

According to Odaily, the U.S. Consumer Financial Protection Bureau (CFPB) has proposed extending the same protection standards to digital wallets as those applied to bank accounts. This initiative would require service providers to compensate customers for losses resulting from hacking or unauthorized transactions. The CFPB plans to broaden the scope of the Electronic Funds Transfer Act to include stablecoins and other digital assets, emphasizing that any asset used similarly to currency will be protected. The aim is to strengthen consumer protection while setting higher compliance standards for the cryptocurrency industry. This rule change could significantly impact U.S. companies holding customer crypto assets, such as exchanges and custodians, as they would need to maintain sufficient reserves to cover potential losses. The CFPB is currently seeking industry feedback and will decide whether to issue a final rule after March 31.