The Acting Director of the Consumer Financial Protection Bureau Argues for ‘Sweet Spot’ in Crypto Regulation
Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, on Wednesday, said the U.S. government needed to discover the “sweet spot” in its oversight of the cryptocurrency ecosystem.
Speaking at the Future of Fintech seminar organized by research and analysis company CB Insights, Mulvaney, who additionally heads the Office of Management and Budget, promoted his pro-bitcoin qualifications, noting that he is fiscally conventional and “was one of the founding members of the bitcoin caucus and blockchain caucus.”
He suggested that rules are essential to protect investors, however, the government should not dissuade prospective investors or developers from getting into the market via troublesome laws or regulations.
“We realized at an early stage in bitcoin that as with any establishing financial technology we needed to discover that sweet spot … if Mt. Gox became a frequent event it significantly undermines confidence in the markets and inhibits development. And if we over-regulate and dissuade people from getting into the marketplace, that has bad effects too.”
To put it differently, Mulvaney said, “we’re looking for that Goldilocks [path] in the middle.”
He discussed the issues that may possibly come up with an absence of investor security, saying: “It’s a new and revolutionary technology, it’s a nonbanking system, it’s whatever. If people still can’t get access to their own money, that’s a problem. So the law’s functioning correctly there.”
What Mulvaney is trying to accomplish now, he argued, is ensuring that the application of an existing law doesn’t lead to unintended consequences.
“If for some reason we’re looking at you and the only way we can look at you is via the lens of the bricks and mortar financial institution, and due to the fact we do that it has this perverse or ridiculous result, that’s what we’re trying to determine and to avoid,” he said.