Hello Fintech Friends,

It seems that not only crypto is having a winter. Last week, the northeast U.S. was hit by a combination of a record-shattering low temperature and powerful wind that was truly “brutal.” I hope all of you were safe and warm. Hang in there, spring is around the corner!

Last week, the U.S. Consumer Financial Protection Bureau (CFPB) proposed major changes to credit card late fees rules, and several countries made major headways into crypto regulation. Let’s dive in.

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1. The CFPB

Last Wednesday, the CFPB said that it proposed an amendment to the 2009 Credit Card Accountability Responsibility and Disclosure Act. The goal of the amendment is to cap late fees on credit card payments at $8 per transaction; a much lower ceiling than current charges, which could be as high as $30 for the first missed payment and $41 for the second. The CFPB estimates that American households pay $12B in such fees per year and hopes that the proposed amendment would bring that figure down to $9B.

2. Crypto Regulation

In the U.S., the most salient development last week was the announcement made by the Financial Accounting Standards Board that new rules related to digital assets have been proposed and that the public will have 75 days to comment on them. The main goal of the new rules is to draw a distinction between digital assets, such as cryptocurrency, and intangible assets, such as trademarks. Reporting on these two types of assets is different. Firms are required to update the value of their holdings of intangible assets only once a year and don’t have to report on the fluctuations in their value. The new rules would require firms to report on the value fluctuations of their holdings of digital assets with a view to providing consumers with more accurate information about the value of firms’ holdings.

Internationally, many countries have been active on the crypto regulation front. Australia concluded its token mapping exercise, which started last year and will be open for comments until March 3. The concluded exercise will shape Australia’s approach to crypto regulation in the coming months. In Europe, the EU has started working on new rules for smart contracts–the backbone of decentralized finance. Also, the UK opened a consultation on a draft comprehensive crypto regulation that covers many important crypto entities and activities, including crypto exchanges, crypto lending, and coin offers. And, in Hong Kong, the Monetary Authority said that new rules will be enacted soon under which algorithmic stablecoins will be prohibited and all stablecoin issuers will be required to obtain a license.

3. DAOs

A new building block of the governance regime of decentralized autonomous organizations (DAOs) is in the making. A DAO called Mango Labs is suing crypto trader Avraham Eisenberg to claw back $47M which the DAO argues was obtained through illegal trades. Eisenberg entered into an agreement with the DAO to return $67M out of the $114M he is facing criminal charges for. The agreement was entered into through a vote on a smart contract, which is how DAOs make decisions. Now, the DAO is saying that this agreement is not binding because it was entered into under “duress,” which raises a question about the conditions under which novel business entities like DAOs can be subject to duress.

4. CBDCs

In what seems to be a response to the declining use of cash in the UK, the Bank of England and His Majesty’s Treasury mentioned that the UK will likely need to issue a central bank digital currency (CBDC) and that they will reveal a roadmap for that purpose next week. Is there a timeline for issuing that CBDC? The answer is yes. By 2030!

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See you next week!