US Consumer Financial Protection Bureau launches Blockchain Regulatory Sandbox, which will be focusing on aiding the financial innovation companies to develop new products and services.
20 July, AtoZ Markets – The Consumer Financial Protection Bureau is planning to launch a regulatory sandbox that aims to encourage Blockchain and other financial technology innovations. According to the head of the CFPB, Mick Mulvaney, the organization intends to assist companies that work on developing these new technologies.
US Consumer Financial Protection Bureau Launches Blockchain Regulatory Sandbox
In addition, the CFPB plans to help these companies with the development of the “products and services” that are offered by them. Mr. Mulvaney has stated that the new office that will be responsible for the initiative will specifically analyze cryptos, other private currencies, and Blockchain-based platforms. The organization will also examine individual “microlending,” as per the official commentary.
Mr. Mulvaney has also added that the agency might look into alternatives to traditional credit scores. He has explained:
“You can make a strong argument … that new technology actually offers new and innovative ways to protect consumers. You are moving light years beyond the complaint hotline to where you can really see things happening in real time.”
US Regulators Need to Find Balance to Encourage Innovation
The new office will be led by Paul Watkins, who has been helping Arizona state to launch its state-level regulatory sandbox for Blockchain and crypto technologies.
Earlier last month, the Office of Management and Budget director has stated during a conference that regulators have to find the “sweet spot” in supporting the financial technology while at the same time preventing scams and hacks.
That time, he signaled the need for new regulatory framework, stating “if … the only way we can look at you is through the lens of the bricks and mortar financial institution, and because we do that it has this perverse or absurd result, that’s what we’re trying to identify and to prevent.”
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