Earlier today, the Consumer Financial Protection Bureau (CFBP) issued final rules on non-bank firms providing payments and transfers. Digital payments have become the norm as people adopt digital wallets, hosted on their smartphones, as simpler and quicker way to transfer funds. While there are many Fintechs engaged in this sector, some of the biggest companies in the world enable payments – like Apple and Google (Alphabet).
The rules will now go into effect 30 days after they are published in the Federal Register, which is pretty much standard practice. But some industry insiders believe the CFPB has overstepped its mandate in creating these new rules, and some see it as a direct assault on innovation by disaffected policymakers soon to be out of the majority following the election.
But could the rules impede innovation, as the Financial Technology Association (FTA) claims, and perhaps impede one very large aspiring Fintech the platform known as X (formerly Twitter)?
Caitlin Long, a long-time digital asset proponent and entrepreneur, says the rules will stop X from “becoming a payments juggernaut.”
WATCH OUT @elonmusk—the Biden/Warren crew just enacted this to stop @X from becoming a payments juggernaut. Wow, a whole new 259-page rule aimed at X…yet more lawfare against you.👊 (Congress can & probably will CRA this…but still…) https://t.co/Xqq3TiKiTs
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) November 21, 2024
Long describes the CFPB payment rule as “lawfare” aimed at X.
The owner of X, Elon Musk, has emerged as a top boogeyman for the left. Once a self-described Democrat, Musk has joined the MAGA crusade, claiming attacks on Free Speech, Cancel Culture, and left-wing authoritarianism have compelled him to move to the center-right. It is known that X has aspirations to become a payments provider this year. CI reported in January, that X will launch peer-to-peer payments in 2024, fulfilling a goal of the platform.
Long does note that Congress can reverse the rule so a legislative change can take place.
It does appear that crypto may have dodged the CFPB’s oversight. The document states, “The Final Rule does not cover transactions in cryptocurrencies or stablecoins.” Once Congress is back in session in early 2025, regulation for digital asset payments—stablecoins—is expected to be quickly approved.
