Hello Fintech Friends,

Welcome back to another week of fintech policy updates! We're thrilled to be back after a short break over the past two weeks. This week, we bring you a roundup of the latest developments in crypto regulation, artificial intelligence (AI), payments, and updates related to the Consumer Financial Protection Bureau (CFPB) from the past week.

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 1. Crypto Regulation

Last Wednesday, Sens. Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced a new stablecoin regulation titled the Payment Stablecoin Act. The new bill authorizes state non-depository trust companies (non-banks) to issue payment stablecoins up to $10B. Institutions exceeding this threshold must obtain authorization as national payment stablecoin issuers, while limited-purpose state/OCC depository institutions (banks) are authorized to issue any amount. Registered issuers are required to maintain full dollar backing for their stablecoins, precluding the use of algorithmic stablecoins. The bill also establishes a detailed receivership regime under the Federal Deposit Insurance Corporation (FDIC) for all payment stablecoin issuers to ensure customers can promptly recover their funds in case of problems, bypassing the need for bankruptcy court proceedings. Earlier in the week, Sen. Sherrod Brown (D-OH), Chair of the Senate Banking Committee and a crypto-skeptic, expressed openness to advancing a stablecoin legislation if his concerns are addressed, raising hopes that a stablecoin regulation could be passed by Congress in 2024.

One day before the new bill was announced, Sen. Elizabeth Warren (D-MA) sent a letter to Secretary of the Treasury Janet Yellen, stressing the importance of incorporating the full array of anti-money laundering (AML) authorities requested by the Treasury Department from Congress last November into any forthcoming stablecoin legislation. The letter outlines a set of concerns that are expected to be fiercely debated in the coming months as discussions around the new stablecoin bill progress in Congress.

2. AI

In our AI news for the week, the challenges facing the Worldcoin project persist as the biometric iris scanning digital ID initiative led by OpenAI CEO Sam Altman encounters scrutiny worldwide. Last week, the Argentine government levied accusations against Worldcoin, citing several consumer protection violations. As a result of these alleged infringements, Worldcoin faces fines exceeding $1M.

3. Payments

On April 15, the US Supreme Court declined to review a case brought by three ATM manufacturers against Visa and Mastercard, who sought to challenge the certification of two plaintiff classes—ATM owners and customers—claiming overcharges by a lower court. With this decision, the certification of these groups will remain in effect, allowing the plaintiffs to proceed with their allegations of collusion between Visa and Mastercard to maintain high ATM fees and stifle competition among ATM networks.

Across the pond, EU antitrust regulators are poised to greenlight Apple's tap-and-go mobile payments system proposals as soon as May. In response to accusations by the European Commission of anti-competitive practices, the tech giant proposed opening the system to rivals. Following input from Apple's competitors and customers, as well as some adjustments made by the company to its proposals, regulators are now prepared to give their approval.

4. CFPB

On Wednesday, April 17, the Republican-led House Financial Services Committee voted to approve a joint resolution proposed by Rep. Andy Barr (R-KY) aimed at blocking a CFPB rule that would cap credit card late fees, slated to take effect as soon as next month. The resolution now advances to the full House of Representatives for consideration. With a slim majority, the Republican-led House is anticipated to approve the measure. However, as Democrats control the Senate, the resolution is likely to falter in that chamber, rendering it ineffective.

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See you next week!