The US Consumer Financial Protection Bureau (CFPB) incited a mixed response from the bitcoin community on 11th August when it issued a new warning to US consumers.
The release evoked sometimes strong language in an attempt to warn the public about the potential dangers of engaging with the bitcoin ecosystem, with CFPB Director Richard Cordray likening the ecosystem to a virtual ‘Wild West’.
Following the release of the guidance, CoinDesk reached out to the CFPB for more details on how the agency has been working to educate its employees and consumers about bitcoin and digital currency, and to highlight its response to the concerns of the bitcoin ecosystem.
Though the agency stopped short of addressing industry concerns, a spokesperson for the US consumer protection group told CoinDesk that it is still actively working to understand the potential consumer protection issues by all emerging technologies, and that bitcoin is just one part of its overarching mandate.
The CFPB said:
“We will continue to carefully monitor the development of digital currencies as they relate to the consumer financial marketplace and, if necessary, take appropriate steps.”
The CFPB declined to comment on its choice of wording in the guidance.
However, the agency suggested that its first priority is to carry out its responsibility of ensuring US consumers are protected in the financial marketplace.
Putting consumers first
The CFPB further directed CoinDesk to more general information about the agency, in which it aimed to illuminate the nature of the CFPB’s most recent statements regarding bitcoin.
For example, the CFPB stressed that it was introduced specifically to address issues consumers face in the financial marketplace and to empower them to make sound financial decisions.
The agency said:
“The CFPB was created in the wake of the financial meltdown to stand up for consumers and make sure they are treated fairly in the consumer financial marketplace. Helping consumers help themselves with tools and financial education is core to the Bureau carrying out its mission.”
It added that it currently compiles tips for consumers on a wide variety of verticals in the financial sector, including remittances, credit cards and now digital currencies.
Federal bitcoin policy evolves
The CFPB did, however, state it is working with a number of agencies to develop US federal policy on bitcoin, though it did not indicate what issues the organisations might be evaluating.
Pointing to the previously published Government Accountability Office (GAO) report, the CFPB noted it is currently working with the following groups to better understand digital currencies and their effects on a wide range of US interests:
- Financial Action Task Force (FATF)
- Interagency Bank Fraud Enforcement Group
- International Organized Crime Intelligence and Operations Center (IOC-2)
- Terrorist Finance Working Group’s New Payments Systems Ad Hoc Working Group
- Virtual Currency Emerging Threats Working Group.
The CFPB was first revealed to be contributing to the ongoing US policy discussion on digital currencies this June.
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