Piggybacking on my article earlier today, Biden and his administration seem to be leaving no stones unturned on their way out. And now, the Consumer Financial Protection Bureau (CFPB) is giving the crypto pot one final stir before leaving the building. In short, with  just days left before Donald Trump reclaims the White House and handpicks a new CFPB chief, the Bureau proposed a rule that could make life very uncomfortable for stablecoin issuers and wallet providers.

(Source: Giphy) 

For starters, the CFPB is arguing that stablecoins and crypto wallets should fall under the Electronic Fund Transfer Act, a law that basically makes sure your bank doesn’t completely screw you over when you transfer money. But applying this to stablecoins? That’s a whole different ball game.

The proposed rule would require stablecoin platforms to disclose risks, protect against unauthorized transactions, and let users cancel bad transfers. Sounds reasonable, until you remember that crypto’s entire vibe is no middleman, no interference. This rule is like trying to make DeFi play by TradFi’s rules—and spoiler alert, that’s not going to sit well with anyone in the space.

(Source: CoinDesk) 

So, why now? Simple: the clock is running out for Rohit Chopra, the CFPB’s current director and a longtime fan of aggressive regulatory moves. Trump will almost certainly get him to the curb once he says the “Oath”, presumably killing the rule shortly after. Meaning, even if Chopra dug his heels in, Congress could nuke the proposal using the Congressional Review Act. It’s basically a coin flip whether this thing will ever make it past the public comment stage.

But still, that didn’t stop the But that didn’t stop the CFPB from going all-in. The proposal argues that stablecoins should be treated as “funds” under existing law, which could extend to other cryptocurrencies like bitcoin. It also suggests that crypto wallets—especially those used for retail transactions—should be classified as financial “accounts.” Unsurprisingly, the crypto crowd is not thrilled. Dennis Kelleher from consumer advocacy group Better Markets is on board, calling the proposal a win for consumers and a step toward leveling the playing field between banks and digital platforms. But over in crypto-land, the knives are out.

(Source: Financial IT) 

For instance, Jack Solowey of the Cato Institute called the CFPB’s arguments “embarrassingly conclusory,” which is basically policy-nerd talk for “this is lazy and bad.” Bill Hughes from Consensys, the Ethereum development firm, called it “law by decree” and suggested the rule would be dead on arrival. Even Nvidia’s GPUs don’t generate this much heat.

At its core, this last-minute move by the CFPB feels like a litmus test for how regulators and policymakers view crypto. For some, stablecoins are a ticking time bomb of unregulated financial chaos. For others, they’re a legitimate innovation that needs room to grow. This proposal tries to thread the needle, but in doing so, it might alienate both camps.

(Source: Giphy) 

The timing doesn’t help either. With Trump set to take power, the CFPB’s regulatory ambitions are likely to get steamrolled. The Bureau’s leaders have historically been far more aggressive than other regulators like the SEC or CFTC, but they’ve also been a target for Republican lawmakers who’d prefer the agency focus on less, well, ambitious projects.

In the end though, most consumers don’t actually care about stablecoin regulations. They care about whether their Venmo transfer goes through or if their Coinbase account gets hacked. For all its ambition, this CFPB proposal feels like it’s solving a problem that hasn’t hit mainstream awareness yet. Meanwhile, crypto insiders are treating this like an existential threat, because for them, it kind of is.

(Source: Giphy) 

On the other hand, if this rule somehow survives Trump’s CFPB and Congress, it could fundamentally reshape how stablecoins and wallets operate in the U.S. But that’s a big “if.” For now, it’s just another chapter in the endless tug-of-war between crypto’s decentralized dreams and Washington’s regulatory reality. Again, will this rule actually stick? Probably not. But it’s a reminder that the crypto Wild West is slowly but surely getting fenced in. And whether you see that as progress or overreach depends entirely on which side of the ledger you’re on.

In the meantime, if you’re a “crypto is my entire personality type”, then keep your eyes out and place your bets accordingly. If you’re like me and just happy to be here, well have a day and enjoy the sh*t show of Washington politics. For now, enjoy your Saturday, and as always, stay safe and stay frosty! Until next time…

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