Pretty serious suspicions are being raised regarding the direction the US financial system (and associated tech companies) are taking, this time by the Consumer Finance Protection Bureau (CFPB).
This government agency’s head Rohit Chopra went as far as to tell an event, dubbed, Making America’s Payment System Work for a Digital Century – that the situation is “lurching toward” a surveillance model that’s in place in China.
This could be the outcome unless new regulation is introduced that would prevent the ever-smaller number of financial firms (with an ever-large piece of the pie) and tech companies in the business of payments, warned Chopra.
The root of the CFPB chief’s concern, the way he presented it, is the growing collection of people’s personal financial data, and how to reduce that trend.
Chopra’s idea is to introduce new rules that would regulate the way payment services report about the way they use personal data, and that concerns “private currencies” as well – digital currencies among them.
According to Chopra, this is necessary because apparently now is the point at which these private companies have their hands on so much data, that their “power over Americans’ financial decisions” has become “unprecedented.”
The CFPB seems concerned that there will be “excessive” surveillance and “even financial censorship” in case things continue without a number of new regulatory actions, that would guarantee payment and commerce don’t mesh like they do in China.
One of these rules would allow the CFPB direct supervision of non-bank platforms’ services geared towards the financial sector – “to limit surveillance opportunities.”
To back all this up, Chopra went into how China’s Alibaba and WeChat work, as cautionary examples of what the US might be sliding into.
There was also talk about digital currencies, with Chopra speaking specifically about the US Treasury’s stablecoin and what risks that brings in terms of surveillance, but also, the “destabilizing runs on the token.”
New rules are the remedy here as well, according to the CFPB chief, who would like to mandate that tech companies provide “more information” about their business models.
But Chopra also wants more insight into “their policies around issuing new digital currencies, and new examinations by his agency,” say reports.
