CFPB Launches Regulatory Sandbox To Encourage Blockchain Innovation
The US Consumer Financial Protection Bureau has decided to launch today a new regulatory sandbox program which has the objective of encouraging financial technology innovation in the country, including the blockchain technology. The announcement was made by the head of the bureau, Mick Mulvaney. The entity wants to assist companies making these new technologies.
According to Mulvaney, the products and the services developed by these companies will be assisted by the CFPB and the office will spearhead an initiative to examine the crypto market and space, platforms based on the blockchain tech.
Some of the other areas that will be investigated with more detail by the government are microlending tokens and platforms, which are known for many scams that are used by their creators, but can also be important as new ways to get credit scores in the case of legitimate companies.
Mulvaney seems to see this new technology in a very positive light, as he believes that these platforms (when they work as they are supposed to), can actually offer technology that will protect the customers a lot more than some of what is currently offered by many financial services.
According to him, one of the main advantages of using the blockchain technology in these situations is that is “light years beyond” the complaint hotlines that exist right now and that you will be able to visualize the whole process basically in front of you, as you can use the blockchain to see the transactions in real time.
Paul Watkins Will Lead New Office
A new office will be created to deal with the issues and help the companies. This office will be led by Paul Watkins, which is notorious for assisting in helping the state of Arizona to launch its own regulatory sandbox for blockchain and cryptos on a state level. Now, he will have to do it on a national scale.
Mulvaney, which is leading the efforts for the creation of the new office, has already supported the blockchain technology in the past. In fact, just last month the director of the Office of Management and Budget told regulators on a conference that they have to find a “sweet spot” in the blockchain space.
According to him, it is the responsibility of the government to encourage the financial technology advancement without allowing hacks and scams to exist, because prohibiting everything would simply lead to drawing innovation away from the point that the country needs it.
At that time, Mulvaney had already hinted at the need for a new regulatory framework for blockchain, which already was a sign that he would be in the front lines of moving the country towards innovation for cryptos and the blockchain technology.