Hi everyone,

If you weren’t yet aware, competition is a key part of fintech policy. Regulators on both sides of the pond are taking action to bring lower prices and better products to consumers. That, and a touch more clarity arrives on what’s shaping up to be a big year for crypto regulation.

• The Fed publishes on CBDC: A research paper reviewing pros and cons of a potential Central Bank Digital Currency didn’t offer much in the way of policy recommendations or a plan of action. Instead the Fed discussed the prudential risks of shifting customer deposits away from private banks, and the need for Congressional authorization to set any CBDC plans in motion. While calling CBDC’s a “highly significant innovation” could be read as praise, the Fed’s prudent stance reflects where payment system modernization falls in its priority list while the broader economy faces pressing inflation and COVID-related challenges.
• Big week for payments competition policy: First the UK’s Payment Services Regulator hit prepaid card providers with sizable fines for “anti-trust behavior,” and published a 5-year plan for competition in payments markets. Then the CFPB published a report on credit card markets showing Americans pay $120 billion in credit card interest and fees each year, or $1000 a year per households. The CFPB report cited market consolidation and unfair withholding of consumer data as barriers to competition, and sent a reminder of their forthcoming rulemaking on Section 1033 of Dodd-Frank, which provides consumers rights to their financial data.
• SEC’s Gensler hopes ‘22 the year for crypto regulation: Chair Gary Gensler intends to bring crypto within the investor protection, but awaits additional authorizations via potential legislation floating around Congress and proposals with the Executive Branch. Meanwhile, FINRA signalled forthcoming disclosure rules for broker dealers in the crypto space. [Link]
• Crackdown on crytpo ads: The UK has for months signalled action against crypto advertising, and just got additional powers to tamp down misleading promotions. Singapore’s Monetary Authority went a step further, issuing a guideline instructing digital payment token (aka cryptocurrency) providers not to promote to the general public, either on their own or via third parties. Companies instead can only advertise on their own websites, mobile apps, or social media accounts.

• Crypto mining subject at energy hearing: TheHouse Energy Committee held a hearing on crypto & climate impact, taking crypto’s expansion as a given and focusing instead on greening mining.